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Last month, Jim purchased $10,000 of US Treasury Bonds (their face value was $10,000). These bonds have a 30-year maturity period, and they pay 1.5% interest every three months (i.e. the APR is 6% and Jim receives a check for $150 every three months). But interest rates for similar securities have since risen to a 7% APR because of interest rate increases by the Federal Reserve Board. In view of the interest rate increases to 7%, what is the current value of Jim's bonds? 7% = 1.75 or 0.00175% Pmt 1 4(quarter) -> Present Value of Annuity → PV 50 (1 (1 - (1 +/- 1)) r 150 1- PV = 1 (1+0.0175) 0.00175 = 146.4893 150 1 (1 - PV₂ = = 296.793 PV3 = (1+0.0175)² 0.0175 150 (1- (1+0.0175)³) 0.0175 = 429.1239 TPV = PV₁ + PV2 + PV3 = $872.41

Last month, Jim purchased $10,000 of US Treasury Bonds (their face value was $10,000). These bonds have a 30-year maturity period, and they pay 1.5% interest every three months (i.e. the APR is 6% and Jim receives a check for $150 every three months). But interest rates for similar securities have since risen to a 7% APR because of interest rate increases by the Federal Reserve Board. In view of the interest rate increases to 7%, what is the current value of Jim's bonds? 7% = 1.75 or 0.00175% Pmt 1 4(quarter) -> Present Value of Annuity → PV 50 (1 (1 - (1 +/- 1)) r 150 1- PV = 1 (1+0.0175) 0.00175 = 146.4893 150 1 (1 - PV₂ = = 296.793 PV3 = (1+0.0175)² 0.0175 150 (1- (1+0.0175)³) 0.0175 = 429.1239 TPV = PV₁ + PV2 + PV3 = $872.41

Introduction to Chemical Engineering Thermodynamics
Introduction to Chemical Engineering Thermodynamics
8th Edition
ISBN:9781259696527
Author:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Publisher:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Chapter1: Introduction
Section: Chapter Questions
Problem 1.1P
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Last month, Jim purchased $10,000 of US Treasury Bonds (their face value was $10,000). These bonds have a 30-year maturity period, and they pay 1.5% interest every three months (i.e. the APR is 6% and Jim receives a check for $150 every three months). But interest rates for similar securities have since risen to a 7% APR because of interest rate increases by the Federal Reserve Board. In view of the interest rate increases to 7%, what is the current value of Jim's bonds? 7% 4(quarter) = 1.75 or 0.00175% 1 Pmt (1 (1+r)", r Present Value of Annuity → PV PV = PV2 = PV3 = 1 150 (1 − (1 + 0.0175). 0.00175 1 (150 (1 − (1 + 0.0175)² - 0.0175 1 150 (1 − (1 + 0.0175)³ 0.0175 = 146.4893 = 296.793 = 429.1239 TPV = PV₁ + PV2 + PV3 = $872.41
Transcribed Image Text:Last month, Jim purchased $10,000 of US Treasury Bonds (their face value was $10,000). These bonds have a 30-year maturity period, and they pay 1.5% interest every three months (i.e. the APR is 6% and Jim receives a check for $150 every three months). But interest rates for similar securities have since risen to a 7% APR because of interest rate increases by the Federal Reserve Board. In view of the interest rate increases to 7%, what is the current value of Jim's bonds? 7% 4(quarter) = 1.75 or 0.00175% 1 Pmt (1 (1+r)", r Present Value of Annuity → PV PV = PV2 = PV3 = 1 150 (1 − (1 + 0.0175). 0.00175 1 (150 (1 − (1 + 0.0175)² - 0.0175 1 150 (1 − (1 + 0.0175)³ 0.0175 = 146.4893 = 296.793 = 429.1239 TPV = PV₁ + PV2 + PV3 = $872.41
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i am having a hard time coming up with the same calculations. can u plz expand

150 1 - (1+0.07)- 4 0.07 4 -120 Steps Examples 0.07-120 1+ simplify 150 4 0.07 4 Solution 7502.56306...
Transcribed Image Text:150 1 - (1+0.07)- 4 0.07 4 -120 Steps Examples 0.07-120 1+ simplify 150 4 0.07 4 Solution 7502.56306...
10000 (1 + 0.07) 120 Steps Examples simplify Solution 10000 (1 + 0.07) 120 1247.00975...
Transcribed Image Text:10000 (1 + 0.07) 120 Steps Examples simplify Solution 10000 (1 + 0.07) 120 1247.00975...
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