Given:
Par value of the bond : 5,000
coupon rate of the bond: 5%
par value x coupon rate = annual interest
5,000 x 5% = 250 annual interest
Samuel will receive an annual interest of $250 until the bond reaches maturity, or he sells the bond to someone else.
Regardless of the changes in bond prices in the market, Samuel will always receive a fixed annual interest of 250 from his bond.
Answer:
Annual Interest = $80
Interest rate = 8.89%
Explanation:
The investor pays discounted price for this bond.
We know, Annual Interest = Coupon payment/Market value
Given,
Coupon payment = Principal value*Coupon rate
Coupon payment = $1,000*8% = $80
Market value = Price pays for the bond = $900
Therefore, the annual interest rate = $80/$900
Annual Interest rate = 8.89%
Note that, coupon payment is the annual interest rate.
The eco-nomy was in long-run equilibrium when aggre-gate demand increased. At this point in time, the expec-ted inflation has start-ed to adjust to the new high-er actual inflation rate. Accor-ding to the (Friedman) natural rate the-ory, this means the unemploy-ment rate in the economy must curr-ently be <u><em>below the natu-ral rate</em></u>.
Milton Friedman defi-ned the natural rate of unemploy-ment as the level of unemployment that result-ed from real economic forces, the long-run level of whi-ch could not be altered by monet-ary policy. Accor-ding to the general equili-brium model of economics, natural unemploy-ment is equal to the level of unemploy-ment of a labor mark-et at perfect equilibrium.
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The correct answer is $380 per unit.
The lower-of-cost-or market rule requires that you report the lower value of either the purchase price or current market price of items in inventory. In this case the current market price is lower, so it should be used when calculating the value of inventory.
A cash payment received from a customer for a product purchased on account would be recorded as DEBIT TO CASH AND CREDIT TO ACCOUNT RECEIVABLE. Cash is debited because cash has been received by the company and it has to be debited to the asset account of cash. The account receivable is credited to record the fact that money has been received.
