BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Solutions

Chapter
Section
BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

Calculate the annual interest and current yield of the following bonds.

Company Coupon Rate Annual Interest Market Price Current Yield
23. Blockbuster 7.50 125.25

To determine

To calculate: The annual interest and current yield of a Blockbuster bond with a coupon rate of 7.50% currently selling at market price of 125.25.

Explanation

Given Information:

A Blockbuster bond with a coupon rate of 7.50% and the currently selling at market price is 125.25.

Formula used:

Steps to calculate the current yield of a bond:

Step 1: Calculate the annual interest and current price of the bond with the formula,

Annualinterest=Parvalue×Couponrate

Step 2: Divide the annual interest of the bond by current market price as,

Currentyield=AnnualinterestCurrentmarketprice

Step 3: Convert the final answer to percent, rounded to nearest tenth.

Calculation:

A Blockbuster bond with a coupon rate of 7.50%, which can be denoted in decimal as,

7.50100=0.075

The annual interest can be calculated as,

Annualinterest=Parvalue×Couponrate=1,000×0.075=75

Thus, annual interest is 75.

The current market price can be calculated as a percent of the par value of $1,000,

Pricepercent=125

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 20 Solutions

Show all chapter solutions add
Sect-20.I P-4RESect-20.I P-5RESect-20.I P-6RESect-20.I P-7RESect-20.I P-8RESect-20.I P-9RESect-20.I P-10RESect-20.I P-11RESect-20.I P-12RESect-20.I P-13RESect-20.I P-14RESect-20.I P-15RESect-20.I P-16RESect-20.I P-17RESect-20.I P-18RESect-20.I P-19RESect-20.I P-20RESect-20.I P-21RESect-20.I P-22RESect-20.I P-23RESect-20.I P-24RESect-20.I P-25RESect-20.I P-26RESect-20.I P-27RESect-20.I P-28RESect-20.I P-29RESect-20.I P-30RESect-20.II P-8TIESect-20.II P-10TIESect-20.II P-11TIESect-20.II P-1RESect-20.II P-2RESect-20.II P-3RESect-20.II P-4RESect-20.II P-5RESect-20.II P-6RESect-20.II P-7RESect-20.II P-8RESect-20.II P-9RESect-20.II P-10RESect-20.II P-11RESect-20.II P-12RESect-20.II P-13RESect-20.II P-14RESect-20.II P-15RESect-20.II P-16RESect-20.II P-17RESect-20.II P-18RESect-20.II P-19RESect-20.II P-20RESect-20.II P-21RESect-20.II P-22RESect-20.II P-23RESect-20.II P-24RESect-20.II P-25RESect-20.III P-12TIESect-20.III P-13TIESect-20.III P-14TIESect-20.III P-15TIESect-20.III P-1RESect-20.III P-2RESect-20.III P-3RESect-20.III P-4RESect-20.III P-5RESect-20.III P-6RESect-20.III P-7RESect-20.III P-8RESect-20.III P-9RESect-20.III P-10RESect-20.III P-11RESect-20.III P-12RESect-20.III P-13RESect-20.III P-14RESect-20.III P-15RESect-20.III P-16RESect-20.III P-17RESect-20.III P-18RESect-20.III P-19RESect-20.III P-20RESect-20.III P-21RESect-20.III P-22RESect-20.III P-23RESect-20.III P-24RESect-20.III P-25RESect-20.III P-26RESect-20.III P-27RESect-20.III P-28RESect-20.III P-29RESect-20.III P-30RECh-20 P-1CRCh-20 P-2CRCh-20 P-3CRCh-20 P-4CRCh-20 P-5CRCh-20 P-6CRCh-20 P-7CRCh-20 P-8CRCh-20 P-9CRCh-20 P-10CRCh-20 P-11CRCh-20 P-12CRCh-20 P-13CRCh-20 P-14CRCh-20 P-1ATCh-20 P-2ATCh-20 P-3ATCh-20 P-4ATCh-20 P-5ATCh-20 P-6ATCh-20 P-7ATCh-20 P-8ATCh-20 P-9ATCh-20 P-10ATCh-20 P-11ATCh-20 P-12ATCh-20 P-13ATCh-20 P-14ATCh-20 P-15ATCh-20 P-16ATCh-20 P-17ATCh-20 P-18ATCh-20 P-19ATCh-20 P-20ATCh-20 P-21ATCh-20 P-22ATCh-20 P-23ATCh-20 P-24ATCh-20 P-25ATCh-20 P-26ATCh-20 P-27ATCh-20 P-28ATCh-20 P-29ATCh-20 P-30ATCh-20 P-31ATCh-20 P-32ATCh-20 P-33ATCh-20 P-34ATCh-20 P-35ATCh-20 P-36ATCh-20 P-37ATCh-20 P-38ATCh-20 P-39ATCh-20 P-40ATCh-20 P-41ATCh-20 P-42ATCh-20 P-43ATCh-20 P-44ATCh-20 P-45ATCh-20 P-46ATCh-20 P-47ATCh-20 P-48ATCh-20 P-49AT

Additional Math Solutions

Find more solutions based on key concepts

Show solutions add

Find all possible real solutions of each equation in Exercises 3144. 2x6x42x2+1=0

Finite Mathematics and Applied Calculus (MindTap Course List)

Cancer Survivors The number of living Americans who have had a cancer diagnosis has increased drastically since...

Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach

Find each product. (5x2)(3x4)

Elementary Technical Mathematics

True or False: If and , then .

Study Guide for Stewart's Multivariable Calculus, 8th

Evaluate ∫16t3 ln t dt. 4t4 + C 4t3 ln t − 16t3 + C 4t4 − t3 ln t + C 4t4 ln t − t4 + C

Study Guide for Stewart's Single Variable Calculus: Early Transcendentals, 8th