Question

Timothy periodically purchases bonds issued by Prince Waste Collection. Last year, he bought two bonds in February, two bonds in June, and one bond in August, then sold them all in October. Prince Waste Collection bonds were selling at 94.593 in February, 92.661 in June, 105.480 in August, and 102.882 in October. If each bond that Timothy bought had a par value of $1,000, how much profit did he make from buying and selling these bonds

Answer 1

Answer:

$344.22

Explanation:

Calculation to determine how much profit did he make from buying and selling these bonds

First step is to calculate how much Timothy invested in February, June and August

February=2 x $1,000 x 94.593%

February = $1,891.86

June= 2 x $1,000 x 92.661%

June= $1,853.22

August= $1,000 x 105.48%

August = $1,054.80

Total investment = $4,799.88

($1,891.86+$1,853.22+$1,054.80)

Seconds step

Since Timothg sold 5 bonds in the month of October at 102.882 each which means he will received:

Amount received= 5 x $1,000 x 102.882%

Amount received= $5,144.10

Now let determine his Total profit

Total profit = $5,144.10 - $4,799.88

Total profit= $344.22

Therefore how much profit did he make from buying and selling these bonds will be $344.22