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Home Q & A Board Science-Related Homework Help Mathematics
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Hillier Hillier
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6 years ago
A $25 000, 7% bond with semi-annual coupons redeemable at par in twenty-two years is purchased to yield 6% compounded semi-annually. Determine the gain or loss if the bond is sold seven years after the date of purchase at 98.25.
Textbook 
Contemporary Business Mathematics with Canadian Applications

Contemporary Business Mathematics with Canadian Applications


Edition: 11th
Authors:
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#1
6 years ago
FV = $25 000; P/Y = C/Y = 2; b =   = 0.035; i =   = 0.03; n = (22-7)2 = 30;
Premium = [25000(0.035) - 25 000(0.03)]
   = 125(19.6004414) = $1274.03
Book value: 27000.00 + 1274.03 = $28 274.03
Proceeds: 25000(0.9825)    = $24 562.50
Loss    = $3711.53
Hillier Author
wrote...
#2
5 years ago
Helpful!
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