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givi [52]
3 years ago
8

Last year, Brian bought a bond for $10,000 that promises to pay him $800 per year. This year, he can buy a bond for $10,000 that

promises to pay $900 per year. If Brian wants to sell his old bond, what is its price likely to be?
Business
1 answer:
kiruha [24]3 years ago
7 0

Answer:

the price likely to be $8,889

Explanation:

The computation of the price likely to be is shown below:

The rate of interest in the last year

= $800 ÷ $10,000

= 8%

Now this year the rate of interest it would be

= $900 ÷ $10,000

= 9%

Now the price likely to be is

= $800 ÷ 9%

= $8,889

hence, the price likely to be $8,889

hence, the same is to be considered

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The buyers benefit from the purchase money mortgage due to the flexible requirements that is needed in collecting the loan while the sellers benefits from the high interest rates that is added to the loan.

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Hope this helps :)

Explanation:

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