A bond pays $50,000 per year and has a face value of $500,000 at the end of 8 years when it has to be redeemed. If its current discounted price is $390,000, what true interest could be earned on the bond? Ans. (14.9%)

Q: Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4…

A: Present value (PV) = P1500 Discount rate (r) = 4% Period (n) = 1 Year

Q: What is the coupon rate of the bond if coupons are paid semiannually?

A: Coupon Rate: It refers to the annual income expected by the bondholder for investing in the…

Q: An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the…

A: The Stated semiannual interest payment $40 Rate of interest = 5% 20 years * 2 = 40 payments Present…

Q: A mortgage bond issued by Automation Engineering is for sale for $8,700. The bond has a face value…

A: Introduction Yield To maturity: Simply means the rate of return the investors can expect on a bond…

Q: ACT has an outstanding bond with a face value ( principal) of 1,000which would mature in 10 years.…

A: Current market value = present value of all future cash flows   Here FV = 1000; nper (or time…

Q: A bond has a face value of 2,000 $ is redeemable in 8 years, and pays interest of 200 $ at the end…

A: A bond is borrowing security that is issued by the company in order to raise funds from the market…

Q: The saleemi corporation’s $1,000 bonds pay 6 percent interest annually and have 11 years until…

A: Yield to maturity can be calculated by following function in excel =RATE (nper, pmt, pv, [fv],…

Q: What is the yield to maturity for a seven-year bond that pays 11% interest on a $1000 face value…

A: Calculation of yield to maturity (YTM): Excel spread sheet:

Q: Find the bond premium and purchase price on a P2,000 bond with interest at 2% compounded…

A: To calculate the bond price we will use below formula   Bond price = [FV*(1+r)-n]+[C*{1-(1+r)-n}/r]…

Q: Three years ago, Jack’s Automotive Jacks issued a 20-year callable bond with a $1,000 maturity value…

A: Yield to maturity is the bond's return if the bond is held to maturity. For a coupon-paying bond,…

Q: A 6-year bond pays interest of $80 annually and sells for $950. What are its coupon rate and YTM

A: Computation of the coupon rate and YTM is shown: Hence, the coupon rate is 8% and YTM is 9.12%.

Q: Seaside issues a bond that has a stated interest rate of 12%, face amount of $40,000, and is due in…

A:

Q: A 10-year, P20,000 bond was issued at a nominal interest rate of 8% with semiannual compounding.…

A: A bond is investment security issued by large business entities and governments to raise borrowing…

Q: Ten bonds are purchased for $8.856.11 and are kept for 5 years. The bond coupon rate is 9% per year,…

A:

Q: a bond pays P340 interest per year and has a face value of P8,328 at the end of 9 years, when it has…

A: Current value of bond = sum of present values of all cash flows Here pmt = 340; nper = 9; fv = 8328…

Q: Company H issues a $20,000,000 bond on January 1, 2020 with a coupon rate of 9%.  The present value…

A: Amortization Method: It is an accounting technique used to decrease the value of a loan or…

Q: Woodland Company issues bonds with a face value of $375,000 that pay 4% interest semiannually and…

A: First of all we will find the price of the bond with 4% market interest rate. We can find the price…

Q: A corporate bond pays 5% of its face value once per year. If this $5,000 10-year bond sells now for…

A: Bonds are financial instruments which provide fixed returns to its holders. Bonds actually have a…

Q: Kinight, Inc., has issued a 3 year bond that pays a coupon rate of 6.10% coupon payments are made…

A: Excel Spreadsheet:

Q: A $15,000, 5.5% bond is purchased 10.5 years before maturity to yield 8% compounded annually. If the…

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: The Lo Sun Corporation offers a 5.3 percent bond with a current market price of $858.50. The yield…

A: Given:

Q: A bond pays P342 interest per year and has face value of P9,964 at the end of 15 years, when it has…

A: Here coupon (PMT) = 342; rate = 13%; FV = 9964 and nper (or n) = 15. In excel we can use the PV…

Q: A company issues a $100,000 bond due in 4 years paying 7 percent interest annually at year- end.…

A: We require to calculate the present value of bond in this question. We can calculate the present…

Q: One hundred $1,000 bonds having bond rates of 8% per year payable annually are available for…

A: Bond valuation is done through the concepts of present value. The value of the bond is the present…

Q: ACT has an outstanding bond with a face value (principal) of ₱1,000.00 which would mature in 10…

A: The market value of a bond is the price at which you could sell it to another investor before it…

Q: A 20-year bond with a face value of P 5,000 is offered for sale at P 3,800. The nominal rate of…

A: Bonds are one of the most traded financial asset in the financial market. It is demanded by the…

Q: Ten bonds are purchased for $ 9,340.69 and are kept for 5 years. The bond coupon rate is 6% per…

A: Given 10 bonds are purchased for 9340.69 and the face value of bonds should to be calculated. Let…

Q: A 50,000$ bond has a maturity date of 6 years. the bond interest rate is 6% per annum payable…

A: Bonds are the liabilities of the company which is issued to raise the funds required to finance the…

Q: Compute the specified quantity.A 4-year bond costs $20,000 and will pay a total of $2,800 in…

A: The total amount of interest is $2,800.The cost of bond is $20,000.Number of years is 4.The annual…

Q: What is its annual interest rate r (as a percent)?

A: A bond is a debt instrument with which a shareholder credits cash to an entity, which can be a…

Q: A 10%, 25 year bond with a par value of $1,000 pays on an annual basis has a current call feature…

A: Yield to maturity(YTM) is the return that the investor expects to receive from the bond by holding…

Q: A bond with 12 years to maturity has an annual interest payment of $65. If the bond sells for its…

A: Given information: Par value of bond is $1,000 Annual interest payment is $65 Number of years is 12

Q: - A 10-year, P20,000 bond was issued at a nominal interest rate of 8% with semiannual compounding-…

A: The Price of the bond refers to the present value of the coupon cash flows and the maturity value.…

Q: An investor is considering buying a 20-year corporate bond. The bond has a face value of $1000 and…

A: Corporate bond-It is a bond issued by a company to fund its business operations, major expansions,…

Q: Company 'A' issues a bond at $1,000 and offers a payment of $50/year every year for 3 years. If the…

A: Current yield of the bond can be calculated by using the online financial calculator. Current market…

Q: Seaside issues a bond with a stated interest rate of 12%, the face value of $40,000, and due in 8…

A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.

Q: A bond promises to pay you $7,000.00 in 10 years. If you are able to earn 6 percent on securities of…

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type])…

Q: The Saleemi​ Corporation's ​$1,000 bonds pay 5 percent interest annually and have 13 years until…

A: Bonds are long-term financing debt. It is a company that raises funds for its business. In return, a…

Q: The Saleemi Corporation's $1000 bonds pay 7 percent interest annually and have 14 years until…

A: Given, Face Value = $1000 Coupon rate = 7% Coupon payment = $1000*7% = $70 Current Price = $1095…

Q: Company 'A' issues a bond at $1,000 and offers a payment of $50/year every year for 3 years. If the…

A: A bond is a finanical tradeable security issued by large business entities and government bodies.…

Q: A bond matures in 20 years, at which time it pays the owner $1,000. It also pays $70 at the end of…

A: Year of Bond =20 Annual payment =$70 Face Value =$1000

Q: corporation’s bonds mature in 23 years and pay 7 percent interest annually. If you purchase the…

A: The given problem can be solved using RATE function in excel. RATE function computes yield to…

Q: The face value of a bond is $3000.00. The firm offering the bond pays 1% of the sales price to the…

A: Rate of return is one of the discounted cash flow techniques used by business entities in order to…

Q: A $140,000 bond bearing interest at 7% payable annually is bought five years before maturity to…

A: Bond value is the discounted value of the expected cash flow the bond will generate till the…

Q: Fitzgerald's 15​-year bonds pay 6 percent interest annually on a ​$1,000 par value. If the bonds…

A: Here, To Find: Yield to maturity of bonds annually and semi-annually and the difference between the…

Q: A corporate bond has a face value of $10,000, a bond interest rate of 8% per year payable…

A: A bond is a fixed income instrument that represents a loan made by an investor to a borrower…

Q: The Saleemi​ Corporation's $1,000 bonds pay 6 percent interest annually and have 14 years until…

A: Par value (FV) = $ 1000 Coupon rate = 6% Coupon amount (C) = 1000*0.06 = $ 60 Years to maturity = 14…

Q: What is the approximate yield to maturity for a $1,000 par value bond selling for $1,120 that…

A: Yield to Maturity: The yield to maturity (YTM) of a bond is the overall rate of return that the bond…