5 6.A savvy investor paid $7,000 for a 20-year $10,000 mortgage bond that had a bond interest rate of per year payate quartelyThree years after he purchased the bond, market Interest rates went down so the bond increased in value the investo scd thebond for $11,500 three years after he bought it, what rate of return did the investor make per quartet and per year nominThe rate of return per quarter is0154 05The rate of return per year is

Rate of return is defined as the net gain or net loss of an investment over the particular period of…

A savvy investor paid $7000 for a 20 year $10.000 mortgage bond that had a bond iterest ate of per yea payte quly Three years after he purchased the bond, market interest rates went down, so the bond increased in va bond for $1.500 three years after he bought it, what rate of return did the investor make per qarter and per yew nom invest sokd the The rate of retun per quarter is The rate of return per year is

A savvy investor paid $7000 for a 20 year $10.000 mortgage bond that had a bond iterest ate of per yea payte quly Three years after he purchased the bond, market interest rates went down, so the bond increased in va bond for $1.500 three years after he bought it, what rate of return did the investor make per qarter and per yew nom invest sokd the The rate of retun per quarter is The rate of return per year is

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EA: Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the...

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A savvy investor paid $6000 for a 20-year $10,000 mortgage bond that had a bond interest rate of 8% per year, payable quarterly. Three years after he purchased the bond, market interest rates went down, so the bond increased in value. If the investor sold the bond for $11,500 three years after he bought it, what rate of return did the investor make (a) per quarter, and (b) per year (nominal)?
Suppose that someone owns a 30 year $24,000 T-bond with a rate of 4%. After 6 years the bond is sold for cash, but the interest rates have fallen to 2.5%. (a)How much has the bond paid in total for the first 6 years? (b)How much will the bond pay the person buying it over the next 24 years? (c)How much is the bond currently worth?
Suppose that someone owns a 30 year $14,000 T-bond with a rate of 6%. After five years the bond is sold for cash, but the interest rates have risen to 8.5%. (a)How much has the bond paid in total for the first five years? (b)How much will the bond pay the person buying it over the next 25 years? (c)How much is the bond currently worth?
1. You bought a bond five years ago for $935 per bond. The bond is now selling for $980. It also paid $75 in interest per year, which you reinvested in the bond. Calculate the real ized rate of return earned on this bond. 2. Refer again to the bond information in Problem 1. You expect to hold the bond for three more years, then sell it for $990. If the bond is expected to continue paying $75 per year over the next three years, what is the expected rate of return on the bond during this period? (LG 3-1)
A.) You bought a bond five years ago for $935 per bond. The bond is now selling for $980. It also paid $75 in interest per year, which you reinvested in the bond. Calculate the realized rate of return earned on this bond. B.) Refer again to the bond information in Problem 1. You expect to hold the bond for three more years, then sell it for $990. If the bond is expected to continue paying $75 per year over the next three years, what is the expected rate of return on the bond during this period?
hi, this is my hw question. You bought a bond five years ago for $880 per bond. The bond is now selling for $920. It also paid $60 in interest per year, which you reinvested in the bond. Calculate the realized rate of return earned on this bond
ASAP 1. Amed bought a bond tor $800. The bond has a face value of $1000, pays 10% dividend semiannualy and will mature in 10 yearsa) Draw the cash flow diagram of the bond. b)What is the yield to maturity of the bond (bond's rate of return per year)? c) Suppose that Ahmed is yet to buy this bond provided that the market interest rate is 8% nerest compounded quarterly, what will be the maximum that he will pay to buy this bond.
You purchased a bond at a price of $1,400. In 25 years when the bond matures, the bond will be worth $10,000. It is exactly 17 years after you purchased the bond and you can sell the bond today for $7,300. If you hold the bond until it matures, what annual rate of return will you earn from today? Multiple Choice O 3.6 percent 4.0 percent 8.2 percent 10.2 percent 4.5 percent
solve a, b and c please. An investor has purchased a 20-year bond with a nominal value of 1000 TL, an annual coupon interest rate of 10% and a commitment to pay coupon interest annually. The investor paid 850 TL for this bond. The annual interest rates in the market today are 12%. a) The investor sold the bond 2 years after receiving it when the interest rate on the market is 8%. Calculate the rate of return of the investor from this investment. Calculate what the rate of return would be if the investor sold this bond in the 3rd year. b) Consider that the market rate will be stable for upcoming years as 12%. Calculate the value of the bond in the 5th, 6th and 10th years. c) 11 years have passed since the receipt of the bond, and the market interest rates increased to 18%. Calculate the new value of this bond.
10. Determining Interest and Approximate Bond Value. Assume that three years ago, LO: you purchased a corporate bond that pays 4.60 percent. The face value of the bond was $1,000. Also assume that three years after your bond investment, comparable bonds are paying 5.20 percent. a. What is the annual dollar amount of interest that you receive from your bond investment? b. Assuming that comparable bonds are paying 5.20 percent, what is the approximate dollar price for which you could sell your bond? c. In your own words, explain why your bond increased or decreased in value. e here to search O 144 96 5
6) You buy a 5-year bond that pays a $4 coupon each year for five years (first coupon paid the end of year 1). At the end of 5 years, you receive back your principle of $100 (in addition to the final coupon payment of $4). Immediately after you purchase the bond, interest rates move to 7%. What is the present value of the cash flows you will receive? Now say rates moved to 2%, what is the present value of the cash flows you receive?
3. You own several bonds and as an astute investor, you keep track of your interest payments (also known as coupon payments or cash flows). Annually, you receive a fixed total of interest payments of $2,000 per year from these bonds for the next 5 years and your required rate of return is 7.5%. What is the current value of your bond investment? Show your work and explain your answer.