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Hoochie [10]
3 years ago
11

Josh bought a bond with a par value of 1,500 from company ABC. The bond pays twenty annual coupons of 90 and matures at the end

of twenty years. It is bought and redeemed at par. Immediately after his purchase, company ABC issues another bond with the same coupon structures and redemption value as the par bond, but with a lower annual effective yield rate of 4%. Josh calculates the price of the new bond using the first-order modified approximation and the first-order Macaulay approximation. Let X be the the new price using the first-order Macaulay approximation and let Y be the new price using the first-order modified approximation. Calculate X-Y.
Business
1 answer:
ElenaW [278]3 years ago
3 0

Answer: c

Explanation:

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The amount of the gain or loss on disposal of the fixed asset is $2,000.

<h3>Gain or loss on disposal </h3>

First step

Book Value = Original Cost of Equipment - Accumulated Depreciation

Book Value = $30,000 -$28,500

Book value= $1,500

Second step

Gain=Sale Price -Book Value

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Inconclusion the amount of the gain or loss on disposal of the fixed asset is $2,000.

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Javier is currently paying ​$1 comma 200 in interest on his credit cards annually.​ If, instead of paying​ interest, he saved th
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Answer:

after 9 years:

FV $15,625.2437

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Explanation:

We have to solve for the annuity of 1,200 dollar with a yield of 9% at the proposed times:

C \times \frac{(1+r)^{time}-1 }{rate} = FV\\

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1200 \times \frac{(1+0.09)^{9} -1}{0.09} = FV\\

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1200 \times \frac{(1+0.09)^{14}-1 }{0.09} = FV\\

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time = 19

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