<u>Answer:</u>
The yield to maturity of the bonds is 11%
<u>Explanation:</u>
Price at which the bonds is currently trading = 283.30$
Face Value = $1000
Coupon rate = 2%
Hence the coupon bond rate = $1000 ×2%
=
=$20
Years to maturity: 20 years
Formula used:
=
Where C is the bond coupon rate
F is the face value
P is the price
N is the number of years
=
=11%
The yield to maturity of the bonds is 11%
The value of a car after 10 years be $20898.27 if the car rental company assumes each car in their fleet depreciates by 6% per year option (a) $20898.27 is correct.
<h3>What is an exponential function?</h3>It is defined as the function that rapidly increases and the value of the exponential function is always a positive. It denotes with exponent
where a is a constant and a>1
We can solve this problem by exponential function:
The word depreciate means the price is decreasing.
We can find the value be when the car is 10 years old:
p = 38800(1 - 0.06)¹⁰
p = 38800(0.94)¹⁰
p = 20898.266 ≈ $20898.27
Thus, the value of a car after 10 years be $20898.27 if the car rental company assumes each car in their fleet depreciates by 6% per year option (a) $20898.27 is correct.
Learn more about the exponential function here:
#SPJ1