Seven months ago, Rosetta purchased a bond for $3,000. Initially, she calculated the bond would be equivalent to a eight-month simple interest loan with an interest rate of 4.8% per year. However, Rosetta's car unexpectedly broke down today. To pay for the car repair, she decided to sell the bond to a friend for $3,080. (A) What is the maturity value of the bond? Round your answer to the nearest dollar. 3096 (B) From the friend's perspective, what is the equivalent simple interest rate per year? Round your answer to the nearest tenth of a percent. (C) By selling the bond for $3,080, Rosetta's true interest rate was not necessary the same as she initially calculated. What was her true equivalent simple interest rate per year?

Seven months ago, Rosetta purchased a bond for $3,000. Initially, she calculated the bond would be equivalent to a eight-month simple interest loan with an interest rate of 4.8% per year. However, Rosetta's car unexpectedly broke down today. To pay for the car repair, she decided to sell the bond to a friend for $3,080. (A) What is the maturity value of the bond? Round your answer to the nearest dollar. 3096 (B) From the friend's perspective, what is the equivalent simple interest rate per year? Round your answer to the nearest tenth of a percent. (C) By selling the bond for $3,080, Rosetta's true interest rate was not necessary the same as she initially calculated. What was her true equivalent simple interest rate per year?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 18P

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