Suppose a bond pays annual interest of $50. Compute the interest rate per year that a bondholder can earn for each face value in the following table.Face Value Interest Rate per Year(Dollars)2005001,000(Percentage)If the annual interest paid stays the same and the face value of the bond goes up, then the interest rate paid for the bond per year

Detailed explanation:Given that the annual interest paid is $50, and the face values are $200, $500,…

Answered: Suppose a bond pays annual interest of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Write the formula of Effective interest?
Assume the interest rate rises to 7.0%. What is the total cost of interest with the new interest rate? (Use Table 15.1) NOTE: Round your intermediate calculations and final answer to the nearest cent.
You have really gone above and beyond in spending on your fraternity initiation party and ran up $11, 000 on your parent's credit card. You apologize to them and promise to pay $350 per month towards paying off the balance fully. You know that the credit card interest rate is 24%. How long will it take you to fully pay off your good times? a. A bit over 4 years b. About 2 and a half years c. About 3 years d. It depends
Real interest rate is always higher than nominal interest rate True/False
QUESTION 1 Muhammad takes out a loan of $ 4,324, at 8% simple interest, for 9 years. How much will he pay back at the end of year 9? QUESTION 2 Calculate the amount of interest on an investment of AED 149,956 at 8% simple interest for 7 years.
Given demand and supply for loanable fund Market at given time period in the table below Quantity of loanable fund demanded (billion $) Real Quantity of loanable fund supplied (billion $) interest rate 0.5 400 120 0.75 380 140 1 360 160 180 1.25 340 1.5 320 20 1.75 300 220 280 240 2.25 260 260 2.5 240 280 2.75 220 300 3 200 320 3.25 180 340 3.5 160 360 3.75 140 380 4 120 400 Instructions: 1. Using excel, find the equilibrium real interest rate and quantity of loanable fund, show the point on the graph. 2. If this country experiences an expansion business cycle phase that increases the demand for loanab fund by $40 billion. a) Find the new equilibrium real interest rate and quantity of loanable fund. b) Show the shift on the graph. 3. Starting from the original equilibrium If there is a decreases in aggregate income that decreases supply for loanable fund by $20 billion. a) Find the new equilibrium real interest rate and quantity of loanable fund. b) Show the shift on the graph. (
None
MULTIPLE-CHOICE QUESTION How does compounding interest help you grow wealth over time? because your contributions to investment accounts grow steadily O because interest rates always increase over time O because interest payments are continually added to the principal
A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $3,000. Each year after that, you will receive a payment on the anniversary of the last payment that is 4% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 15% per year. a. What is today's value of the bequest? b. What is the value of the bequest immediately after the first payment is made? ARCKICHI a. What is today's value of the bequest? Today's value of the bequest is $(Round to the nearest dollar. b. What is the value of the bequest immediately after the first payment is made? The value of the bequest immediately after the first payment is made is $ (Round to the nearest dollar.)
3.57 Consider the following three individuals. Just after their 19th payment: o Robert Dixon had a balance of $80,000 on a 9%, 15-year mortgage; o Wanda Harper had a balance of $80,000 on a 9%, 20-year mortgage; and o Tony Zang had a balance of $80,000 on a 9%, 30-year mortgage. How much interest did each individual pay on the 20th payment?
Compute the following: The present value of $25,000 each year for 4 years at a 7 percent interest rate The present value of $152,000 each year for 5 years at a 6 percent interest rate The present value of $60,000 each year for 10 years at a 6.5 percent interest rate
6. You may borrow or lend at a 5% interest rate, which you expect to remain stable forever. Make a choice and explain your answer in each scenario below. a. You may receive a gift of $500 today or a gift of $540 next year. b. You may receive gift of $100 today or a four-year loan of $500 without interest. c. You may receive a $350 rebate on an $8000 car or one year of no-interest financing on the full price of the car. d. You have just won $1 million in the lottery. You may receive $500,000 now or the full million, paid out in 20 annual payments of $50,000. e. Alternatively, you may take $500,000 now or receive $25,000 per year for eternity (a contract that your heirs will inherit).

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