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Author Question: You are late paying a bill for 11,200.66. You have made arrangements to pay off the bill in ... (Read 99 times)

TFauchery

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on: Jul 10, 2018
You are late paying a bill for 11,200.66. You have made arrangements to pay off the bill in installments of 260 per month, and you will be charged monthly interest of 1.2 on the balance owing.
 
  How long will it take you to pay off the account balance? (round your answer to nearest month)
  A) 61 months
  B) 60 months
  C) 62 months
  D) 63 months
  E) 64 months

Question 2

Mountain Treks Inc. has issued ten-year zero-coupon bonds with a 1,000 face value. If the bonds are currently selling for 514.87, what is the yield to maturity?
 
  A) 6.75
  B) 6.86
  C) 10.45
  D) This question cannot be answered because there is no coupon payment provided.


tjayeee

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Reply #1 on: Jul 10, 2018
Answer to Question 1

A

Answer to Question 2

Answer: A
Explanation: A) Use the convention of assuming semiannual discounting.
MODE = END, P/Y = 2, C/Y = 2
INPUT 20 ? -514.87 0 1,000
KEY N I/Y PV PMT FV
CPT 6.75


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