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timama [110]
2 years ago
12

A 10-year, 10.00%, $5,000 bond that pays dividends quarterly can be purchased for $4,610.

Business
1 answer:
aliina [53]2 years ago
7 0

Answer: a. 11.00% - 12.00%

Explanation:

We can find the rate using Excel.

Payments are quarterly so we need to adjust the variables to quarterly figures:

Period = 10 years * 4 = 40 quarters

Present value = $4,610 (should be a negative number)

Future value = $5,000 at maturity

The effective rate will be 2.9% as shown in the attachment.

This is a quarterly figure so convert it to annual:

= 2.9 * 4

= 11.6%

<em>It is between 11% and 12%</em>

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Answer:

B) Transferring interest income from a taxpayer's investment to his young daughter

Explanation:

If you want to pay less taxes there are two basic ways that you can do it:

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  2. moving income form a tax payer that falls under into a high tax bracket to another taxpayer that falls under a lower tax bracket, e.g. giving stock to your children as a gift

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kaheart [24]
If Ray earns $900 a week and deductions are 28% Ray's take home pay is:
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