Mildred can purchase a municipal bond with a par (face) value of $1000 that will mature in 10 years. The bond pays 6% interest compounded quarterly. If she can buy this bond for $1050, what rate of return will she earn?
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Mildred can purchase a municipal bond with a par (face) value of $1000 that will mature in 10 years. The bond pays 6% interest compounded quarterly. If she can buy this bond for $1050, what
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- Isona has owned a $10,000, 10-year bond for 4 years and is considering selling it. If it has a bond rate of 4% annually, Isona paid $9,100 for it originally, and she wants an 9% annual yield, how much should she charge for the bond?Emily purchased a bond valued at $10,000 for highway construction for $4,410. If the bond pays 6.4% annual interest compounded monthly, how long must she hold it until it reaches its full face value?Marcie has some extra money that she wants to place into a relatively safe investment. Her employer is offering to employees a generous 5% discount for 10-year $5,000 bonds that carry a coupon rate of 6% paid semiannually. The expectation is to match her return on other safe investments, which have averaged 6.7% per year compounded semiannually. (This is an effective rate of 6.81% per year.) Should she buy the bond?
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- Aunt Tillie has deposited $33,000 today in an account which will earn 10 percent annually. She plans to leave the funds in this account for seven years earning interest. If the goal of this deposit is to cover a future obligation of $65,000, what recommendation would you make to Aunt Tillie?If Martha borrowed $22,000 from Wachovia Bank at 7.5 percent interest for 3 years, the principal (face value) of the loan would beMathias purchases a 7-year CD for $5000 with 1.1% APR compounded monthly, and a 7-year bond for $5000 with a 4.3% coupon rate, paid annually. How much will Mathias’s original $10000 investment be worth at the end of the 7 years? Round your answer to the nearest cent.$_____________________
