5) Consider two bonds. The first is a 2n year bond with price $2,250, has annual coupons with theratio of the effective annual coupond rate to the effective annual yield rate r/i = 1.04, and the presentvalue of the redemption value is $500.The second one is a n year zero coupon bond with the same redemption value and effective annualyield rate as the first bond and price of $1,000. Find the par value of the first bond.

To find the par value of the first bond, we can use the formula for the present value of a bond,…

Answered: 5) Consider two bonds. The first is a…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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5. The price of a house is 400000. Then, you make a down payment of 130000 and take a 30-year mortgage at 4% per annum for the balance. How much will be your monthly payment?
5. What is the time period of a P10,000 loan at 6.75% simple interest, in which the total amount of interest paid was P618.75?
A loan of $26,000 is paid off in 36 payments at the end of each month in the following way: Payments of $650 are made at the end of the month for the first 12 months. Payments of $650 + x are made at the end of the month for the second 12 months. Payments of $650 + 2x are made at the end of the month for the last 12 months. What should x be if the nominal monthly rate is 12.2%?
2. Suppose that you take an add-on loan for $24,000 at an annual rate interest of 5.45% to be repaid in semi-annual (six-month) installments over two years. How much will semi-annual payments be? Use the close-end method.
The debtor wants to pay off a debt due from three amounts: 1000 riyals, 1500 riyals and 2000 riyals, on dates separated from today by 30, 35 and 40 days, in one batch after 38 days. What is the basic value of the payment, given that the rate used is 10%?
Bond X is a premium bond making semiannual payments. The bond pays a coupon rate of 6.8 percent, has a YTM of 6.2 percent, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond pays a coupon rate of 6.2 percent, has a YTM of 6.8 percent, and also has 13 years to maturity. The bonds have a par value of $1, 000. What is the price of each bond today? If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 3 years? In 8 years? In 12 years? In 13 years? What's going on here? Illustrate your answers by graphing bond prices versus time to maturity. Do this without using excel, showing all work.
Ian won the lottery; however, the lottery company gave her the following two options to receive her prize money: ● Option (a): $8,000 in four months and $18,000 in nine months. • Option (b): $3,000 immediately and $24,000 in twelve months. Assume that money earns 4.75% p.a. simple interest and use today as the focal date. a. What was the equivalent value of the payments under option (a) at the focal date? Round to the nearest cent b. What was the equivalent value of the payments under option (b) at the focal date? Round to the nearest cent c. Which option would be economically better for Ian and by how much? O a. Option (a) O b. Option (b) is better by Round to the nearest cent SAVE PROG
Suppose that a loan is being repaid with 60 equal monthly payments, the first coming a month after the loan is made. If the rate of interest is 9.7 percent convertible monthly, and the amount of principal in the 22nd payment is 230, how much interest is in the 44th payment? Thank you!
Lucas purchases a 3,000 par value 12-year bond with 3% semiannual coupons for 2,760. He is able to reinvest his coupon payments at a nominal rate of 4% convertible semiannually. Calculate his nominal annual yield rate convertible semiannually over the 12-year period.
17) Determine the simple Interest Rate applied to a Principle of $100,250 over 10 years if the total interest paid equals the Principal.
If a 12-day single payment loanhas a periodic interest rate of11.2%, what is the approximateAPR of the loan?
1. Say for instance you buy a house for 250,000. Then, you make a down payment of 15% of the purchase price and take a 30-year mortgage at 6% per annum for the balance. How much will he be paying every month? (Round to the nearest hundred, example, for 2435, your answer will be 2400, do not include the value of cents.)

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