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pickupchik [31]
3 years ago
10

The price of a bond with no expiration date is originally $1,000 and has a fixed annual interest payment of $150. If the price o

f the bond then falls by $100, what will be the interest rate yield to a new buyer of the bond
Business
2 answers:
stiv31 [10]3 years ago
6 0

Answer:16.67%

Explanation:

Given the following;

Bond price = $1000

Coupon rate = $150 (amount of interest paid on the bond annually)

Calculating the yield rate of the bond to a new buyer.

The price of the bond has fallen by $100

Therefore,

New bond price = $1000 - $100 =$900

Therefore, the yield rate is given by;

(Coupon value/bond price) × 100

(150/900) × 100

1.667 × 100 =16.67%

Lelu [443]3 years ago
4 0

Answer:

16.7 percentage

Explanation:

bond price = $1000 - $100 = $900

fixed amount / bond price * 100 = IR

(150/900) * 100 = 16.7%

The reason for this equation is that interest rate is the amount a lender charges for the use of assets expressed as a percentage of the principal.

originally the price if the bond is $1000 which later falls by $100, so that leaves us to a $900 bond rate.

The interest rate is typically noted on a annual basis known as the annual percentage rate (APR).

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Pam and Lennyâs ice cream shop charges $1.6 for a cone. Variable expenses are $0.35 per cone, and fixed costs total $2,200 per m
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Answer:

Pam and Lenny's Ice Cream Shop

a. The effect of the promotion on operating income for the second week of February is an increase by $350.

b. The promotion should occur.  The shop will make additional operating income of $350 within the second week.  And there will be spillover positive effects during the coming weeks after the promotion.

Explanation:

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Contribution = $1.25

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Additional sales from the promotion = 650 cones

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Total costs                                      $690.00

Additional income                          $350.00

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