A $350,000 face value bond having a bond rate of 7% nominal payable semi-annually is purchased for $473,500 and kept for 6 years, at which time it is sold. How much should it sell for in order to yield a 8% nominal return on the investment? $661,520 $522,150 $624,646 $574,023 $517,875
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- A $200,000 bond having a bond rate of 8% payable annually is purchased for $190,500 and kept for 6 years, at which time it is sold. How much should it sell for in order to yield a 7% effective annual return on the investment? a. $168,000 b. $171,000 c. $174,000 d. $177,000.A $9,000 bond matures in 10 years and pays 2 percent interest twice a year. If the bond sold for $7,000, what is the annual actual investment rate? a. IRR = 7.15%% b. IRR = 5.10% c. IRR = 3.58% d. IRR = 6.23%A $5,000 bond with a bond rate of 5% payable semi-annually was purchased for $4,500, kept for 10 years and redeemed at face value. What is the effective annual return on investment (ROI)? Express your answer as a percentage (do not include %), rounded to 3 decimal places, e.g., 10.235% is 10.235. 6.469 Integer, decimal, or E notation allowed
- 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%Investment in a Bond You invest in a 10-year $10,000 bond that pays interest at an annual rate 7% every 6 months for 10 years. The market rate (yield), i.e., what you will earn on the bond is 5%. Thus, you will receive the maturity value of $10,000 at the end of 10 years, and interest payments every 6 months of $350 (10,000 x 7% x 6/12). Requited: Calculate the issue price of the bond - the amount you will invest today to purchase this bond. Cash Flow Maturity Value Interest Payment Issue Price Required: Six Month Period N Amount Beginning Balance 10,000 350 Prepare an investment schedule for the first two months. Investment Schedule Present Value Factor Appropriate Interest Rate Interest earned Interest Received Present Value Ending balanceA $1,000, 9.50% semiannual bond is purchasedfor $1,010. If the bond is sold after three years andsix interest payments, what should the selling pricebe to yield a 10% return on the investment?
- How much will the coupon payments be of a 25 year $5,000 bond with a 8% coupon rate and semi annual payments? A. $800 B. $400 C. $200 D. $67One hundred $1,000 bonds having bond rates of 8% per year payable annually are available for purchase. If you purchase them and keep them until they mature in 4 years, what is the maximum amount you should pay for the bonds if you wish to earn no less than a 7% effective annual return on yourinvestment?One hungred $1,000 bonds having a bond rate of 8% per year payabie quarterly are purchased for $98,000, kept for 7 years, and sold for $95,000. Determine the "effective" annual yield rate on the bond investment. A. 11.50% В. 9.17% С. 8.87% D. 2.22%
- A $1,000 face value bond issued by the Purdue Company currently pays total annual interest of $80 per year and has a 15-year life. a-What is the present value, or worth, of this bond if investors are willing to accept a 10 percent annual rate of return on bonds of similar quality bond? b. How would your answer change is the bond makes semi-annual payments? c-How would your answer in (a) change if, one year from now, investors only required a 6 percent annual rate of return on bond investments similar in quality to the Purdue bond? d-Suppose the original bond can be purchased for $925. What is the bond’s yield to maturity?The Saleemi Corporation's $1,000 bonds pay 6 percent interest annually and have 15 years until maturity. You can purchase the bond for $1,155. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 6 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%. Calculate the value of the following bond: Principal: 10 000 $ Maturity: 3 years Annual interest rate: 4% Investors required rate of return: 2% Where the bond pays the principal at maturity, however, it pays interest twice a year. Please provide your answer rounded. If you get 507.823 write 508.