A bond with a face value of $5,000 pays quarterly interest of 3.5 percent each period. Thirty-four interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8 percent compounded quarterly on your money? Click the icon to view the table of compound interest factors for discrete compounding periods when i=2%. You should pay ???
A bond with a face value of $5,000 pays quarterly interest of 3.5 percent each period. Thirty-four interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8 percent compounded quarterly on your money? Click the icon to view the table of compound interest factors for discrete compounding periods when i=2%. You should pay ???
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
A bond with a face value of $5,000 pays quarterly interest of 3.5 percent each period. Thirty-four interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you
want to earn 8 percent compounded quarterly on your money?
Click the icon to view the table of compound interest factors for discrete compounding periods when i=2%.
You should pay ???
Transcribed Image Text:Single Payment
Uniform Series
Series
Arithmetic
Compound Present
Amount
Sinking
Fund
Uniform
Сapital
Recovery
Factor
Present
Gradient
Worth
Series
Worth
Series
Factor
Factor
Factor
Factor
Factor
Factor,
(F/P,i,N)
(P/F,i,N)
0.98039
(A/F,i,N)-
1.00000
(F/A,i,N)
(A/P,i,N)
* 1.0200
(P/A,i,N)
0.98039
(A/G,i,N)
0.00000
1
1.0200
1.0000
1.0404
0.96117
0.49505
2.0200
0.51505
1.9416
0.49505
1.0612
0.94232
0.32675
3.0604
0.34675
2.8839
0.98680
4
1.0824
0.92385
0.24262
4.1216
0.26262
3.8077
1.4752
1.1041
0.90573
0.19216
5.2040
0.21216
4.7135
1.9604
1.1262
0.88797
0.15853
6.3081
0.17853
5.6014
2.4423
7
1.1487
0.87056
0.13451
7.4343
0.15451
6.4720
2.9208
8
1.1717
0.85349
.11651
8.5830
0.13651
7.3255
3.3961
9.
1.1951
0.83676
0.10252
9.7546
0.12252
8.1622
3.8681
10
1.2190
0.82035
0.09133
10.950
0.11133
8.9826
4.3367
11
1.2434
0.80426
0.08218
12.169
0.10218
9.7868
4.8021
12
1.2682
0.78849
0.07456
13.412
0.09456
10.575
5.2642
13
1.2936
0.77303
0.06812
14.680
0.08812
11.348
5.7231
14
1.3195
0.75788
0.06260
15.974
0.08260
12.106
6.1786
15
1.3459
0.74301
0.05783
17.293
0.07783
12.849
6.6309
16
1.3728
0.72845
0.05365
18.639
0.07365
13.578
7.0799
17
1.4002
0.71416
0.04997
20.012
0.06997
14.292
7.5256
18
1.4282
0.70016
0.04670
0.04378
21.412
0.06670
14.992
7.9681
19
1.4568
0.68643
22.841
0.06378
15.678
8.4073
20
1.4859
0.67297
0.04116
24.297
0.06116
16.351
8.8433
9 2760
21
15157
0 65978
00387R
25 783
0 05878
17.011
Transcribed Image Text:19
1.4568
0.68643
0.04378
22.841
0.06378
15.678
8.4073
20
1.4859
0.67297
0.04116
24.297
0.06116
16.351
8.8433
21
1.5157
0.65978
0.03878
25.783
27.299
0.05878
17.011
9.2760
22
1.5460
0.64684
0.03663
0.05663
17.658
9.7055
10.132
23
1.5769
0.63416
0.03467
28.845
0.05467
18.292
24
1.6084
0.62172
0.03287
30.422
0.05287
18.914
10.555
25
1.6406
0.60953
0.03122
32.030
0.05122
19.523
10.974
26
1.6734
0.59758
0.02970
33.671
0.04970
20.121
11.391
27
1.7069
0.58586
0.02829
35.344
0.04829
20.707
11.804
28
1.7410
0.57437
0.02699
37.051
0.04699
21.281
12.214
29
1.7758
0.56311
0.02578
38.792
0.04578
21.844
12.621
30
1.8114
0.55207
0.02465
40.568
0.04465
22.396
13.025
31
1.8476
0.54125
0.02360
42.379
0.04360
22.938
13.426
32
1.8845
0.53063
0.02261
44.227
0.04261
23.468
13.823
33
1.9222
0.52023
0.02169
46.112
0.04169
23.989
14.217
34
1.9607
0.51003
0.02082
48.034
0.04082
24.499
14.608
35
1.9999
0.50003
0.02000
49.994
0.04000
24.999
14.996
40
2.2080
0.45289
0.01656
60.402
0.03656
27.355
16.889
45
2.4379
0.41020
0.01391
71.893
0.03391
29.490
18.703
50
2.6916
0.37153
0.01182
84.579
0.03182
31.424
20.442
55
2.9717
0.33650
0.01014
98.587
0.03014
33.175
22.106
60
3.2810
0.30478
0.00877
114.05
0.02877
34.761
23.696
65
3.6225
0.27605
0.00763
131.13
0.02763
36.197
25.215
70
3.9996
0.25003
0.00667
149.98
0.02667
37.499
26.663
75
4.4158
0.22646
0.00586
170.79
0.02586
38.677
28.043
80
4.8754
0.20511
0.00516
193.77
0.02516
39.745
29.357
85
5.3829
0.18577
0.00456
219.14
0.02456
40.711
30.606
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