Making the assumption of no compounding interest, suppose you purchase a perpetuity bond from Sense/Net Corporation for $4,000 w

Question

2 years ago

10

Making the assumption of no compounding interest, suppose you purchase a perpetuity bond from Sense/Net Corporation for $4,000 w

ith an annual coupon rate of 3% . Specify all answers to the nearest dollar, and assume a discount rate equal to that of the current interest rate. What is the yearly return on your $4,000 investment?

Mathematics

1 answer:

natali 33 [55] · Answer 1 · 2022-06-29T08:01:06+03:00

Answer:

$120

Explanation:

Data provided as per the given question below:-

Investment = $4,000

Coupon rate in percentage = 3%

The computation of yearly return is shown below:-

Yearly return = Investment × Coupon rate in percentage

= $4,000 × 3%

= $120

Therefore for computing the yearly return we simply investment with coupon rate in percentage.