Ques 6) What are the two methods of calculating the percentage annual return earned by the owner of the discount bonds? Give formula to calculate both of them. Which on of them is more reliable? Explain.

Q: Explain how each of the columns in an amortization schedule is calculated, assuming the bonds are…

A: Amortization is the process of converting long term loans or bonds into series of periodic payment.…

Q: what would be the discount on bonds payable?

A: Discount on bonds payable: This is the value that arises when the bonds are sold at a price less…

Q: Define the structure of interest rates and list two theories used to explain the structure.

A: Introduction Structure of interest rates: The yield curve, or term structure of interest rates,…

Q: Using the formula Interest = Principal x Rate x Time, if all elements are known except for the…

A: Simple interest rate is most easy and quick method method of interest calculation. Simple interest…

Q: o calculate the Internal Rate of Return, you need to know what interest rate to start with. True or…

A: Internal rate of return (IRR) is the rate at which NPV is zero

Q: 7. Identify some economic factors that influence interest rates and explain the effects of each.

A: The interest rate can be defined as the rate used by borrower and lender in order to borrow or lend…

Q: nterest is a method of calculating the interest to be paid on a loan by combining the principal…

A: Add on interest refers to the method which is used when the person acquire the loan or the mortgage…

Q: Explain the difference between each of the following pairs of terms. For each you must include an…

A: a)Common Difference is the difference between the Term and the term that follows it  The ratio is…

Q: HOW TO Find the finance charge of an installment loan.

A: Finance Charge: Generally speaking, financial charges are any fees or charges associated with…

Q: A forward rate is a borrowing/lending rate for a loan to be made at some future date.   Select…

A:

Q: Calculate the loan amount on a purchase having a cash price of $47,900 with a down payment of…

A: Down Payment: The down payment is the portion of the purchase price that you pay out-of-pocket (as…

Q: CHAPTER 2 ASSIGNMENT Your client is having trouble figuring out where all her money goes each month.…

A: "In this chapter, we'll take a look at a client's financial situation and help them figure out where…

Q: What are the four categories of collateral value for secured loans?How does each affect credit risk?

A: Real property (e.g., land, buildings) Tangible personal property (e.g., equipment, vehicles)…

Q: what is the difference between bonds payable and accounts payable? explain your answer?

A: Bond payable and account payable both are liabilities of the company , which is to be paid in future…

Q: tatements, how would one calculate the Book Debt-to-Equity Ration and the Market Debt-to-Equity…

A: Debt to Equity ratio is the ratio which indicates the relative proportion of debt and equity which…

Q: Credit scoring is a process used to   Multiple Choice   determine what interest rate to charge a…

A: Credit score : it is a number between 300 - 850 which depicts consumers creditworthiness.

Q: Explain or illustrate before-tax cost of debt and after-tax cost of debt.

A: In finance the cost of debt is the effective rate that a company pays on its debt. A company can…

Q: Interest expense should be calculated based on interest rates and debt balances and by using a trend…

A: Interest expense is the amount paid periodically on the borrowed amount. The borrowed amount can be…

Q: When interest is calculated on the principal amount borrowed is known as what A. Annuity B. Simple…

A: The interest is paid by the borrower to the lender in exchange for money provided to the borrower.…

Q: What is the process of calculating the remaining balance of different types of loans?

A: The remaining balance of a credit plan equation can be part of two sections, the future estimation…

Q: Define the terms "debt security" and "equity security." Include comparisons and contrasts in your…

A: Introduction: Securities: To raise money from the public or private markets, securities are the…

Q: What are factors that affect the expected rate of return for holders of debt and equity?

A: The expected return is the return which the investors expect to receive in return from their…

Q: What two types of current assets are frequently used as security for short-term loans?

A: Short term loans are generally obtained by companies in order to support their temporary business…

Q: lue. If the bonds are trading with a market's required yield to maturity of 18 percent, are these…

A: Price of bond is the present value of coupon payments and present value of par value of bond taken…

Q: What type of account is Discount on Bonds Payable? What is its normal balance? Is it added to or…

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: Explain or illustrate before-tax cost of debt and after-tax cost of debt. 5. What are the…

A: The equity source and debt source of financing is considered to be important in capital structure.…

Q: The discount rate used in a net present value analysis is the​ ________.   A. rate of interest…

A: Net present value is calculated by the deducting the present value of cash outflows from the present…

Q: Define bonds discount and give an example.

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: How do I calculae the times interest earned ratio?

A: Calculate the times interest earned ratio as follows: Times interest earned ratio = EBIT / Interest…

Q: What is the relationship between bond price and interest rate? Describe in fully how this…

A: Bonds are referred to as those investment securities which are issued by companies as units of…

Q: The application of the present value factors in the computation of carrying amounts of bonds payable…

A: Introduction:- The following principal application for the present value factors in the computation…

Q: To calculate a gain or loss on redemption of a bond, you compare a. The market interest rate to the…

A: Bonds are considered a financial instrument used to raise finance for the organization. It is also…

Q: 1. How are interest rates determined? Discuss and explain the interest rate equation and its…

A: Interest rate can be defined as the price that lenders charge for lending their money to borrowers.…

Q: What is the internal rate of return? How is it used? How does it relate to the concept of compound…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: which of the following is necessary to solve a discount problem?   a.future amount   b.interest…

A: In a discounting problem, the present value of future cash flow is calculated. In order to…