A 10 year bond is redeemable at par of 100,000. The bond has semi-annual coupons of 4000. The bond is bought to yield 6% convert
ible semi-annually. Four months after purchase, calculate the market price based on the theoretical method less the market price based on the semi-theoretical method.
1 answer:
Answer:
$117,544.14
Explanation:
Current Price of bond is $114,877.47.
Accrued interest for 4 month = $4,000 × (4 / 6)
= $2,666.67
Price of bond after 4 month of purchase = $114,877.47 + $2,666.67
= $117,544.14.
Price of bond after 4 month of purchase will be $117,544.14.
The picture attached shows how to get the current price of bond on excel.
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Answer:
The world's population would have been 7.1137 billion in 2012, and this is 0.0437 billion (i.e. 7.1137 - 7.07 = 0.0437) higher compared to the population reference bureau estimate of 7.07 billion in July 2012.
Explanation:
This can be computed using the following exponential formula:
P(t) = P(0)a^t ............................ (1)
Where;
P(t) = World population in year t.
P(0) = World population in year 0 which is 1998 = 5.937 billion
a = base = ?
t = number of years
Substituting the value into equation (1), we have:
P(t) = 5.937 * a^t .......................................... (2)
Since we have 10 years from 1998 to 2008 (i.e. 2008 - 1998 = 10), we have:
P(t) = P(10) = World population in 2008 = 6.771 billion
t = 10
Substituting the value into equation (2) and solve for a, we have:
6.771 = 5.937 * a^10
a^10 = 6.771 / 5.937
a^10 = 1.1405
a =
a = 1.013
Since we have 14 years from 1998 to 2012 (i.e. 2012 - 1998 = 14), we now have:
P(t) = P(14) = World population in 2012 = ?
P(0) = World population in year 0 which is 1998 = 5.937 billion
a = 1.013 as already calculated above
t = 14
Substituting the value into equation (1), we have:
P(14) = 5.937 * 1.013^14
P(14) = 5.937 * 1.192
P(14) = 7.1137 billion
Therefore, the world's population would have been 7.1137 billion in 2012, and this is 0.0437 billion (i.e. 7.1137 - 7.07 = 0.0437) higher compared to the population reference bureau estimate of 7.07 billion in july 2012.