A P500,000, 10-year bond provides for annual interest payments based on a bond rate of 15%. If the bond is redeemed at the end of its full life at par value so as to yield 13% to the investor, what was the original purchase price?
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engineering economy
A P500,000, 10-year bond provides for annual interest payments based on a bond rate
of 15%. If the bond is redeemed at the end of its full life at par value so as to yield 13%
to the investor, what was the original purchase price?
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- A P5000.00, 10-year, 8% bond that pays interest annually was purchased four years ago with a discount of P152.00. If the bond is sold today for P4750.00, determine a) the rate of return realized by the owner; (Ans. 7.8%) b) the rate of return realized by the purchaser if he holds on to the bond until maturity. (Ans. 9.1%)How much can be paid for a P100,000, 10% pa , 20 year bond with interest paid annually, 8 years after its purchase? Assume that the purchaser will be satisfied with 6% pa interest? O P130,825 O P 133,872 O P131,825 O P133,535Determine the market price of a $485,000, 10-year, 8% (pays interest semiannually) bond issue sold to yield an effective rate of 10%. What is the market price?
- A P5000.00 debenture bond that matures in 10 years pays P150.00 every three months. If an investor who bought the bond computed a nominal return of 10% compounded quarterly, determine a) the bond rate; b) the bond’s purchase price. (Ans. 12%; P5627.57)An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is 5%, what is the current market value of the bond? A) $828. B) $893. C) $1,000. D) $1,686. *PV of $1 ordinary annuity is 17.15909: n = 40; i = 5% **PV of $1 is 0.14205: n = 40; i = 5% O A O BAn investor purchases a 15-year, $100,000 par value bond that pays semiannual interest of $4,000. If the semiannual market rate of interest is 5%, what is the current market value of the bond? $89,620.34 $100,000.00 $84,627.55 $79,568.15
- Boxer Corp is issuing $600,000 8% 5 year bonds when bond investors want a return of 10%. Interest is payable semiannually Caculate Present Value of Bond Calculate Present Value of Interest Payments What is selling price of bond? did the bond sell at face value discount or premium?A $1,000 face value bond issued by the Purud Company currently pays total annual interest of $80 per year and has a 13-year life. a-What is the present value, or worth, of this bond if investors are willing to accept a 10 percent annual rate of return on bonds of similar quality if the bond is a Eurobond? b-How would your answer in (a) change if the bond is a U.S. bond? c-How would your answer in (b) change if, one year from now, investors only required a 6 percent annual rate of return on bond investments similar in quality to the Purud bond? d-Suppose the original bond can be purchased for $925. What is the bond's yield to maturity?A $1,000, 9.50% semiannual bond is purchasedfor $1,010. If the bond is sold after three years andsix interest payments, what should the selling pricebe to yield a 10% return on the investment?
- Given the following data of a bond: Face amount P1, 500 Bond Interest rate 6% Interest paid semi-annually P45.00 Terms 10 years Up for sale at the end of 3 years, 7 years to go. The buyer of the bond wishes to earn at the rate of 8% a year compounded semi-annually. What is its fair value at the end of the third year when it is offered for sale? O P1,975.34 O P633.79 O P2,366.21 O P1,341.55d6 Bonds- A mortgage bond with a face value of $10,000 has a bond interest rate of 6% per year payable quarterly. What are the amount and frequency of the interest payments?2. DEF Company will issue $8,000,000 in 10%, 10-year bonds when the market rate of interest is 7%. Interest is paid semiannually. Required: a. Will this interest structure result in a Premium for DEF company or a Discount? b. How much cash will be received from the issuance of the bond? c. How much will the semi-annual interest payment be on the bond?