Answer:
the effective rate is higher
Explanation:
the formula used to calculate effective rate is: effective rate = (1 + r/n)ⁿ - 1
for example, he stated rate is 6%:
- if it is compounded annually, the effective rate is 6%
- if it is compounded semiannually, the effective rate = (1 + 6%/2)² - 1 = 6.09%
- if it is compounded quarterly, the effective rate = (1 + 6%/4)⁴ - 1 = 6.14%
- and so on
Why or why not they should agree with the said issue at hand.
Lobbyists give the politicians a kind of reassuring push in a certain direction when having to decide on the issue.
Answer:
The issue price of the bond is $44,330,000
Explanation:
The issue price of the bond can be computed using the pv formula in excel,which is given as =-pv(rate,nper,pmt,fv)
rate is the semi-annual yield to maturity on the bond which is 7%/2=3.5%
nper is the number of coupon payments the bond would make before maturity,which 15 years multiplied by 2=30
pmt is the semi-annual interest payment of the bond i.e 8%/2*$40.6 million=$1.624 million
The fv is the face value of the bond repayable at maturity which is $40.6 million
=-pv(3.5%,30,1.624,40.6)
pv=$44.33 million
Explanation:
1. The average number of claims
= Claim processing ÷ weeks per year × claim weeks
= 900 ÷ 50 × 8
= 144 claims
2. The average number of house to be claimed
= Claim processing - cars - motorcycle - boats
= 144 - 27 - 15 - 58
= 54 claims
3. The average time
= Claim processing ÷ weeks per year
= 900 claims ÷ 50 weeks
= 18
Per week = 18 × 0.3
= 5.4
So, average time = Cars ÷ Per week
= 27 ÷ 5.4
= 5 weeks
4. The average time
Claimed house = 1 - car insurance claim - motorcycle insurance claims - boat insurance claims
= 1 - 0.3 - 0.4 - 0.25
= 0.05
So, Average time = 54 ÷ (0.05 × 18)
= 54 ÷ 0.9
= 60 weeks