A municipality needs funding for upcoming infrastructure (water and sewer line) repair or replacement. They issue a series of $1,000, 7% semiannual, 11-year bonds . The bonds are initially sold at a discount for $980. If you buy a bond for $980, plan to sell it immediately following the 16th interest payment, and want to earn 9% compounded semiannually on your money, what must be the selling price? Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places.

Q: local finance company quotes a 17% interest rate on one-year loans. So, d you borrow $25.000, the…

A: Loan amount=$25000Interest=4250Monthly payment=2437.50Period=12 months

Q: Miller borrows $310,000 to be paid off in three years. The loan payments are semiannual with the…

A: Instalment= P x R x (1+R)^N / [(1+R)^N-1] N= 3 years*2 = 6 periods R= 10%/2 = 5%

Q: The city is issuing bonds for a building project . You obtain 7200 bond that pays 7% interest…

A: Interest Earned = Amount * rate of Interest * Time                          = 7200 * 7% * 7…

Q: A business wants to borrow $300,000 from a bank for a future investment. The bank offers a 5 year…

A: P= $300,000  T= 5 year compounded quarterly R= 5% interest on the debt Sinking fund interest= 4%,…

Q: A company decides to obtain a small-business loan of $240,000. The financial institution from which…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: A local finance company quotes a 14 percent interest rate on one-year loans. So, if you borrow…

A: The annual percentage rate is the rate that represents the interest rate for a whole year instead of…

Q: On January 1, 2021, Tropical Paradise borrows $37,000 by agreeing to a 6%, six-year note with the…

A: INTRODUCTION: An installment note is a legal obligation or responsibility that compels the borrower…

Q: Drake Corporation takes out a term loan payable in 12 year-end annual installments of P5,000 each.…

A: Annual payment (P) = P 5000 Interest rate (r) = 14% Number of annual payments (n) = 12

Q: Wiseman Video plans to make four annual deposits of $2,000 each to a special building fund. The…

A: The future value for 4 years of ordinary annuity $9,559 is computed by multiplying annual deposit,…

Q: Today is January 1, 2009. The state of lowa has offered your firm a subsidized loan. It will be in…

A: Step 1: First, let's find the annual payment on the subsidized loan using the formula for the annual…

Q: On January 1, 2021, Tropical Paradise borrows $36,000 by agreeing to a 5%, four-year note with the…

A: Journal entry to record issue of installment note and first two monthly payments are as under:

Q: On January 1, 2024, Tropical Paradise borrows $39,000 by agreeing to a 6%, four-year note with the…

A: Lets understand the basics.Journal entry is required to make to record event and transaction that…

Q: A local finance company quotes a 17 percent interest rate on one-year loans. So, if you borrow…

A: Effective Annual Rate, is a financial metric that represents the annual interest rate on an…

Q: The Johns Hopkington Hospital needs to borrow $3,000,000 to purchase an MRI.  The interest rate for…

A: EMI refers to Equal Monthly Installment. It is the amount payable monthly by the borrower to the…

Q: Awesome Bank granted a loan to a borrower on January 1, 2020. The interest rate on the loan is 10%…

A: Carrying value: It is the net book value of the asset at the end of the year after deducting…

Q: On a loan of $1400, interest at 9% effective must be paid at the end of each year. The borrower also…

A: Future value of a present value is the value of that amount after taking into account the time value…

Q: A city has issued bonds to finance a new convention center. The bonds have a total face value of…

A: Consider the following formula for sinking fund, R = Ai/ (1+i)n-1 Here R is the amount of each…

Q: A city borrows $ 1 million, paying semi-annual interest at j2 = 9%. The city creates a sinking fund…

A: From the given information,  Periodic deposit (P) = $37360.93 Rate of interest per year = 8% Deposit…

Q: A Government of Canoda bond will pay $300 at the end of every six months for the next14 years, and…

A: A bond is a debt instrument that is used to raise capital. It can also be traded on the secondary…

Q: A local finance company quotes a 12 percent interest rate on one-year loans. So, if you borrow…

A: The legally quoted rate represents the true cost of borrowing the loan. Effective Annual Rate is the…

Q: A company decides to obtain a small-business loan of $237,000. The financial institution from which…

A: The money can be borrowed and repaid in installments. The interest and principal portions are paid…

Q: A local finance company quotes a 12 percent interest rate on one-year loans. So, if you borrow…

A: Quoted rate can be calculated using the RATE function in excel.   Rate function = RATE ( nper, pmt ,…

Q: Today is January 1, 2009. The state of lowa has offered your firm a subsidized loan. It will be in…

A: Approach to solving the question:Detailed explanation:

Q: A local finance company quotes a 17 percent interest rate on one-year loans. So, if you borrow…

A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Q: Please do both correctly, I'll rate the answer Question: (i) A $10,000 bond is purchased for $9600…

A:

Q: Blue Skies Bank of Florida issues a three-month (90-day) negotiable CD in the amount of $20 million…

A: CD is certificate of deposit that have interest rate specified on that and will receive amount on…

Q: An Iowa state savings bond can be converted to $500 at maturity 11 years from purchase. If the state…

A: Maturity value of bond (F) = $ 500 Years to maturity (n) = 11 Interest rate (r) = 7%

Q: An Iowa state savings bond can be converted to $1000 at maturity 12 years from purchase. If the…

A: Maturity value = $ 1000 Years to maturity = 12 Years Annual interest rate = 2%

Q: On January 1, 2023, the city government provided Swerte Company a zero interest, P6,000,000 loan…

A: In this Question, this is a zero-coupon bond having no interest. Therefore in this, we will…

Q: An indiana state savings bond can be converted to $100 at maturity six years from purchase.If the…

A: The price at which the savings bond is sold can be calculated using interest rate, term to maturity,…

Q: BroadStreet Bank has just been given a $10,000,000, 5 year CD deposit by the local municipality. The…

A: Bonds are a part of investment that provides coupon and yield to maturity to the investors. Bonds…

Q: (i) A $10,000 bond is purchased for $9600 and has a bond rate of 6% per year payable semiannually…

A: Part-1) Face Value of Bond is $10,000 Present Value of bond is $9600 Coupon rate is 6% payable…

Q: Tiary has obtained a special 3-year, $12,000,000 increasing graduated payment mortgage from Nopay…

A: A mortgage is a type of loan that is specifically used to purchase real estate, such as a home or a…

Q: The issuance of bonds by a public agency is often the manner by which projects are funded. The two…

A: A sinking fund has to be created to ensure enough accumulation to honor the repayment commitment at…

Characteristics of Bonds