A simple "EE US Treasury Savings Bond" pays the holder $1000 in 30 years. Given that the applicable interest rate on the bond is 2.5% APR compounded monthly, how much does the bond cost today? (The purchase date is always time t=0 for each transaction).

Q: Consider a fixed-payment security that pays $250 at the end of every year for eight years. If the…

A: Present value of the bonds will present value of annuity received at the end of every year for eight…

Q: bond with a face value of $6,000 pays quarterly interest of 3.5 percent each period. Thirty-four…

A: solution given Face value 6000 Quarterly interest rate 3.5% Number of period 34…

Q: You are thinking about buying a savings bond. The bond costs $70 today and will mature in 10 years…

A: Bond cost = $ 70 Period = 10 Years Maturity value = $ 155

Q: A $5,000 bond is offered for sale. It has a stated interest rate of 7% paid ann end of 8 years, the…

A: Price of bond is sum of present value of the interest payment and present value of face value of…

Q: Banks sometimes quote interest rates in the form of “add-on interest.” In this case, if a 1-year…

A: Annual percentage rate is the interest rate paid in a year on loan amount or on investment. It is…

Q: A deposit of $250 earns the following interest rates:   10 percent in the first year. 8 percent in…

A: Interest earned is the amount earned on the invested amount over the period of investment. It can be…

Q: A bond with a face value of $5,000 pays quarterly interest of 3.5 percent each period. Thirty-four…

A: The price of the bond is calculated by calculating the present value of all the future payments that…

Q: se the following tables to calculate the present value of a $315,000 @ 6%, 5-year bond that pays…

A: The present value of the bond is the future inflows from bonds discounted at the market rate of…

Q: A bond is issued at a price of $500 and pays a interest of $40 per year for the next 7 years. If the…

A: A bond is a kind of debt security issued by the government and private companies for raising funds…

Q: what is the payment every​ year

A: To calculate the payment at the end of each we will use below formulaAnnual payment = PV*rWherePV -…

Q: A personal account earmarked as a retirement supplement contains $242,300. Suppose $200,000 is u…

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: A 10-year, P20,000 bond was issued at a nominal interest rate of 8% with semiannual compounding.…

A: A bond is investment security issued by large business entities and governments to raise borrowing…

Q: You have decided to buy a perpetual bond. The bond makes one payment at the end of every year…

A: Interest Rate = r = 5%Initial Cost of Bond = ic = $3000

Q: The maturity value of a 4-month loan of $4,250 is $4,367.50. What is the annual simple interest rate…

A: The maturity value is $4367.50. The principal amount is . The time is  months. The objective is to…

Q: A bond with a face value of $2,000 pays half-yearly interest at a rate of 8% pa compounded…

A: Bond compounding semi-annually: In this case, the bond has a face value of $ 2000 that pays…

Q: Use the following tables to calculate the present value of a $774,000 @ 6%, 5-year bond that pays…

A: Lets understand the basics. For calculating present value of bond, we need to use below formula. =…

Q: A bond pays P342 interest per year and has face value of P9,806 at the end of 14 years, when it has…

A: Face Value =  P9,806 Time Period = 14 years Coupon (PMT) = P342 Interest Rate = 0.15

Q: Recently, a bank offered six-month CDs (Certificate of Deposit) at 6.0% compounded monthly. (Round…

A: Original Value = $1000 Compounding Frequency = 12 Interest Rate = 6% Period = 6 months    a) Annual…

Q: If a bond will pay $50 interest per year into perpetuity, at what price will this bond sell when the…

A: perpetuity: It is annuity for the infinite time. present value of perpetuity formula: present value…

Q: You pay $25.00 for a bond which can be redeemed in 20 years for $50.00. What annual rate does this…

A: In this question we need to calculate the annual rate of return from the bond.

Q: You purchased a bond and will receive $500 every six months for the next five years. If the market…

A: Present value of annuity can be computed by using the following formula: Here,…

Q: 3. A $500 savings bond pays 6.5% compounded semiannually and matures in 7.5 years. A. What is the…

A: Bonds are the debt security which is offered or issued by the corporates or the governments to…

Q: Suppose you have a k5000 bank deposits. The interest rate is 6% compounded quarterly for 1 year.…

A: The effective annual interest rate (EAR) represents the actual interest rate earned on an investment…

Q: An investor pays P for an annuity which provides payments of 140 at the beginning of each month for…

A: An annuity is a financial product or contract designed to provide a regular stream of income for an…

Q: You have decided to buy a perpetual bond. The bond makes one payment at the end of every year…

A: To calculate the payment at the end of each we will use below formula   Annual payment = PV*r Where…

Q: The Time Value of Money. 2.1-2.2: The U.S. government has a consol bond which pays $100 per year…

A: A bond is financial tradeable security sold by business entities to obtain borrowing funds.…

Q: You are thinking about buying a savings bond. The bond costs ​$50 today and will mature in 9 years…

A: This bond is given in the question is Zero-Coupon Bond which is an issue at discount and mature at…

Q: Suppose a state of California bond will pay $1,000 eight years from now. If the going interest rate…

A: Maturity price (FV) = $ 1000 Period (t) = 8  Years Annual interest rate (r) = 6.4%

Q: Requirement 1. Determine the present value of seven-year bonds payable with face value of $91,000…

A: Face value of bond= $91000Annual coupon rate= 14%Semi-Annual coupon = 14%*91000/2= $6370Years to…

Q: What is its annual interest rate r (as a percent)?

A: A bond is a debt instrument with which a shareholder credits cash to an entity, which can be a…

Q: G.I loan over 30 years has an annual nominal interest rate of 3.8% paid quarterly. What is the…

A: "Hi, Thanks for the Question. Since you asked multiple questions, we will answer first question for…