Lucy Lampkin wants to purchase a bond with a face value of $7,000 and a bond rate of 7.5 percent per year, payable at 3.75 percent semiannually. The bond has a remaining life of 5 years. If Lucy wants to earn at least 9.5 percent per year compounded semiannually, what is the maximum price she would be willing to pay to purchase the bond? $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +5.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Lucy Lampkin wants to purchase a bond with a face value of $7,000 and a bond rate of 7.5 percent per year, payable at 3.75 percent
semiannually. The bond has a remaining life of 5 years. If Lucy wants to earn at least 9.5 percent per year compounded semiannually,
what is the maximum price she would be willing to pay to purchase the bond? $
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +5.
Transcribed Image Text:Lucy Lampkin wants to purchase a bond with a face value of $7,000 and a bond rate of 7.5 percent per year, payable at 3.75 percent semiannually. The bond has a remaining life of 5 years. If Lucy wants to earn at least 9.5 percent per year compounded semiannually, what is the maximum price she would be willing to pay to purchase the bond? $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +5.
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