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saveliy_v [14]
3 years ago
5

Two bonds are available on the market as follows: Bond 1: Face value $250, 5 years to maturity at a simple interest rate of 5%.

Bond 2: Face value $350, 3 years to maturity at a simple interest rate of r. Given that both bonds yield the same interest at maturity, calculate r. Round your answer to the nearest hundredth of a percent. Do NOT round until you have calculated your final answer.
Mathematics
2 answers:
lorasvet [3.4K]3 years ago
7 0

Answer:

5.95%

Step-by-step explanation:

Lera25 [3.4K]3 years ago
4 0

Answer:

5.95%

Step-by-step explanation:

Bond 1:

I = 250(.05)5

I = $62.50

Bond 2:

62.5 = 350(3)r

62.5 = 1050r

r = 62.5/1050

r = 5.95%

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