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Challenge problem. Each holiday season, Michael received a U.S. savings bond from his grandmother. Michael eventually received twelve savings bonds as shown in the following table: The bonds vary in their rates of interest and their face values. Assume today is December 31, 2011. What is the value of this portfolio of U.S. savings bonds? On what date does each of the individual bonds reach its face value or maturity date (note that the price is half the face value)? Estimate to the nearest month and year for each bond. Note: The bonds continue earning interest past their maturity dates. ……. What is the current value of the bond that was issued on 12/31/1990? $ (Round to the nearest cent.)

Challenge problem. Each holiday season, Michael received a U.S. savings bond from his grandmother. Michael eventually received twelve savings bonds as shown in the following table: The bonds vary in their rates of interest and their face values. Assume today is December 31, 2011. What is the value of this portfolio of U.S. savings bonds? On what date does each of the individual bonds reach its face value or maturity date (note that the price is half the face value)? Estimate to the nearest month and year for each bond. Note: The bonds continue earning interest past their maturity dates. ……. What is the current value of the bond that was issued on 12/31/1990? $ (Round to the nearest cent.)

Essentials Of Investments
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
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Challenge problem. Each holiday season, Michael received a U.S. savings bond from his grandmother. Michael eventually received twelve savings bonds as shown in the following table: The bonds vary in their rates of interest and their face values. Assume today is December 31, 2011. What is the value of this portfolio of U.S. savings bonds? On what date does each of the individual bonds reach its face value or maturity date (note that the price is half the face value)? Estimate to the nearest month and year for each bond. Note: The bonds continue earning interest past their maturity dates. What is the current value of the bond that was issued on 12/31/1990? (Round to the nearest cent.)
Transcribed Image Text:Challenge problem. Each holiday season, Michael received a U.S. savings bond from his grandmother. Michael eventually received twelve savings bonds as shown in the following table: The bonds vary in their rates of interest and their face values. Assume today is December 31, 2011. What is the value of this portfolio of U.S. savings bonds? On what date does each of the individual bonds reach its face value or maturity date (note that the price is half the face value)? Estimate to the nearest month and year for each bond. Note: The bonds continue earning interest past their maturity dates. What is the current value of the bond that was issued on 12/31/1990? (Round to the nearest cent.)
Issue Date 12/31/1990 12/31/1991 12/31/1992 12/31/1993 12/31/1994 12/31/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001 TOTAL Price $25 $25 $50 $25 $25 $25 $50 $25 $25 $25 $25 $25 $350 Face Value $50 $50 $100 $50 $50 $50 $100 $50 $50 $50 $50 $50 Interest Rate 6.0% 6.0% 3.0% 3.0% 4.0% 6.0% 6.0% 6.0% 4.0% 4.0% 6.0% 6.0% Maturity Date (MM/YYYY) ? ? ? ? ? ? ? ? ? ? ? ?
Transcribed Image Text:Issue Date 12/31/1990 12/31/1991 12/31/1992 12/31/1993 12/31/1994 12/31/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999 12/31/2000 12/31/2001 TOTAL Price $25 $25 $50 $25 $25 $25 $50 $25 $25 $25 $25 $25 $350 Face Value $50 $50 $100 $50 $50 $50 $100 $50 $50 $50 $50 $50 Interest Rate 6.0% 6.0% 3.0% 3.0% 4.0% 6.0% 6.0% 6.0% 4.0% 4.0% 6.0% 6.0% Maturity Date (MM/YYYY) ? ? ? ? ? ? ? ? ? ? ? ?
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