look for exact amoun of current value and take note P = 5,000 Andrew invested X today in a savings bond that pays out P (principal plus interest) every quarter withfirst payout to be received 6 months from now. Assume that money is worth 9% payable monthly.PPP1/20 4/20 7/20 10/20 1/20 4/20P P7/201PP P P P+10/20 1/20 4/20 7/20 10/20 1/20 4/20 7/20 10/20(2)3Hint: Current Value at time t = FV(past payments up to current payment at time t) + PV(future payments).Use FV and PV formulas for the case when #PP < #ICP.

Now that you have provided a numerical value of P, this question will be solved. We have to find the…

Andrew invested X today in a savings bond that pays out P (principal plus interest) every quarter with first payout to be received 6 months from now. Assume that money is worth 9% payable monthly. P P P P 1/20 4/20 7/20 10/20 1/20 4/20 P P + 1 7/2010/20 (2 P P P P + 1/20 4/20 7/20 10/20 1/20 4/20 7/20 10/20 3

Andrew invested X today in a savings bond that pays out P (principal plus interest) every quarter with first payout to be received 6 months from now. Assume that money is worth 9% payable monthly. P P P P 1/20 4/20 7/20 10/20 1/20 4/20 P P + 1 7/2010/20 (2 P P P P + 1/20 4/20 7/20 10/20 1/20 4/20 7/20 10/20 3

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 9FPE

See similar textbooks

Similar questions

A Series EE U.S. government savings bond accrues 3.5% interest each year. The bond matures in three years, at which time the principal and interest will be paid. The bank will pay the taxpayer at a 3.5% interest rate each year if he agrees to leave money on deposit for three years. What tax advantage does the Series EE bond offer that is not available with the bank deposit?
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
Assume that you purchase a $3,000 bond issued by Kohls that pays 6 percent interest each year, paid every 6 months. What is the amount of each interest payment? (Round your answer to 2 decimal places.) Multiple Choice $18.00 $90.00 $180.00 $9.00 $3,000.00
Yoda wrote a non-interest bearing promissory note for 32050 that will mature in 12 years and 6 months. What are the proceeds of the note if money is worth 8.9% compounded quarterly? END/BEG P/Y C/Y N 1/Y PV PMT FV
Please give me the Investor's journal transactions for the following investment. $10,000,000 (2-year 10% bond interest payable 6 months). Investor buys at $9,653,500 = 12% return (6% every 6 months).
Adrian invested $14,000 in a savings bond that matures today for $41,270. How many years did the bond grow if the annual rate of change is 6.190017%. For full marks your answer(s) should be rounded to the nearest whole year.
Wallmart's bonds mature in 15 years and pay 9% annual interest. If you purchase the bonds for $1,250 what is your yield to maturity? a. 9.36% b. 9.00% c. 6.36% d. 6.20%
You purchase a 6% $1,000 bond with a term of 5 years and reinvest all interest payments. If interest rates rise to 9% after you purchase the bond, what is the return on your investment in the bond? Assume annual payments/compounding. 6.33% 6.69% 9.00% 6.45%
A P5000.00 debenture bond that matures in 10 years pays P150.00 every three months. If an investor who bought the bond computed a nominal return of 10% compounded quarterly, determine a) the bond rate; b) the bond’s purchase price. (Ans. 12%; P5627.57)
11. Jared wants to invest money in a 6% savings account that compounds semiannually. Jared would like the account to have a balance of $110,000 2-years from now. How much must Jared deposit to accomplish his goal? 12. Pathfinder issues a bond with a coupon rate of 9%, face amount of $50,000, and is due in 5 years. Interest payments are made semi-annually. The effective rate for this type of bond is 10%. What is the issue price of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Assume a $1000 bond issue at the rate of 10% for 15 years. a)What is the interest payment for this bond annually b)What is the interest payment on semi-annually c)How much should the investors pay for this bond i.e. the value