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Sunny_sXe [5.5K]
3 years ago
13

At the beginning of his current tax year, David invests $13,410 in original issue U.S. Treasury bonds with a $10,000 face value

that mature in exactly 25 years. David receives $540 in interest ($270 every six months) from the Treasury bonds during the current year, and the yield to maturity on the bonds is 3.4 percent. (Round your intermediate calculations to the nearest whole dollar amount.) a. How much interest income will he report this year if he elects to amortize the bond premium
Business
1 answer:
vagabundo [1.1K]3 years ago
6 0

Answer:

The amount of income that David will report this year if he elects to amortize the bond premium is $455.94.

Explanation:

This can be calculated as follows:

Interest income = Carrying value of the bond * Yield to maturity…………….. (1)

Where;

Carrying value of the bond = $13,410

Yield to maturity = 3.4%

Substituting the values into equation (1), we have:

Interest income = $13,410 * 3.4% = $455.94

Therefore, the amount of income that David will report this year if he elects to amortize the bond premium is $455.94.

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Suppose that over the past year, the nominal interest rate was 5 percent, the CPI was 150.3 at the end of the year, and the CPI
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Answer:

The correct answer is option c.

Explanation:

The nominal interest rate was 5 percent.

The CPI was 150.3 at the end of the year, and the CPI was 144.2 at the beginning of the year.

The 5% nominal interest rate means that the dollar value of savings increased at 5%.

Inflation rate

= \frac{(150.3 - 144.2)}{144.2}

= 0.0423 or 4.2%

The real interest rate

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= 5 - 4.2

= 0.8%

The real interest rate of 0.8% indicates that the purchasing power of savings increased at 0.8%.

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3 years ago
Glendale Paving currently has 45,000 shares of stock outstanding that sell for $38 per share. Assume no market imperfections or
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Answer:

$31. 15

Explanation:

From the question we are required to find the new stock price considering that no market imperfections or tax effects exist.

stock dividend = 22 percent

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At a a stock dividend of 22 percent, new share price would be

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= $31.15

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3 years ago
A lender uses a credit report to _____.
MrRissso [65]
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Answer:

Option a                            

Explanation:

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Such kind of behavior is needed in large organisations where the number of employees working is very high and different individuals have different goals for themselves. Thus, from the above we can conclude that the correct option is A.

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Answer:

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