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Author Question: A 700 bond at a 15.25 interest rate is purchased at 90 of face value. What is the rate of annual ... (Read 54 times)

daltonest1984

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on: Jun 24, 2018
A 700 bond at a 15.25 interest rate is purchased at 90 of face value. What is the rate of annual yield to the investor? Assume the bond is purchased on the interest date.

Question 2

Randy is considering the purchase of 20 bonds. What is the total expenditure for these bonds? Face value of each bond: 1,200 Price per bond: 55.5 Interest rate: 12.125 Commission per 1,500 bond: 15


meryzewe

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Reply #1 on: Jun 24, 2018
Answer to Question 1

17;
700  0.9 = 630
1  7 = 7
7 + 630 = 637
700  0.1525 = 106.75
106.75  637 = 0.17 = 17

Answer to Question 2

13,620;
20  1,200  0.555 = 13,320
15  20 = 300
13,320 + 300 = 13,620


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