Answer:
YTM = 6.51%
YTC = 6.40%
Explanation:
We need to solve using excel goal seek or bond formulas to generate the yield (interest rate) which matches the future couponb and maturity payment with the current selling price of the bond:
Present value of the coupon
C 40.000 (1,000 x 8% / 2 payment per year)
time 28 (14 years x 2 payment per year)
rate 0.032529972 (generate using goal seek tool)
PV $727.8688
Pv of the maturity (lump sum)
Maturity 1,000.00
time 28.00
rate 0.032529972
PV 408.06
PV c $727.8688
PV m $408.0612
Total $1,135.9300
As this is a semiannual rate we multiply it by 2
0.032529972 x 2 = 0.065059944 = 6.51%
We repeat the procedure with changing the time and end-value to adjust for the callabe conditions:
C 40.000
time 14 (7 years x 2 payment per year)
rate 0.032015131
PV $445.6984
Maturity 1,073.00 (call price)
time 14.00
rate 0.032015131
PV 690.23
PV c $445.6984
PV m $690.2316
Total $1,135.9300
Againg his will be a semiannual rate so we multiply by two:
0.032015131 x 2 = 0.064030263 = 6.40%
Answer:
Total PV= $522.92
Explanation:
Giving the following information:
First payment= $450 at the end of the 7th year
Second payment= $450 at the end of the 12 year
Interest rate= 6% compounded annually
<u>To calculate the present value, we need to use the following formula on each payment:</u>
PV= FV/(1+i)^n
Cf1= 450/1.06^7= 299.28
Cf2= 450/1.06^12= 223.64
Total PV= $522.92
Answer:
for the first loan the origonal loan of $180,000 goes up to $453,166
and the second one is $462,446
Answer:
$28,000 and $12,000, respectively
Explanation:
Marginal cost = incremental cost from Plan C to Plan D
= total cost (plan D) - total cost (plan C)
= 72,000 - 44,000 = $28,000
Marginal benefit = incremental benefit from Plan C to Plan D
= total benefit (plan D) - total benefit (plan C)
= 64,000 - 52,000 = $12,000
Therefore marginal cost and benefits for Plan D = $28,000 and $12,000, respectively
Stephen Gary "Steve" Wozniak, nicknamed "Woz", is an American inventor, electronics engineer, programmer, and technology entrepreneur who co-founded Apple Inc.<span>Steven Paul "Steve" Jobs was an American entrepreneur, businessman, inventor, and industrial designer.
</span><span>Steven Paul "Steve" Jobs was an American entrepreneur, businessman, inventor, and industrial designer.</span>
