The following table lists several corporate bonds. Treat these as zero coupon bonds, as in Example 2. Company AT&T Bank of America General Electric Goldman Sachs Verizon Wells Fargo Time to Maturity (years) 10 10 2 3 8 7 Annual Compound Interest Rate (%) 3.97 3.42 5.12 5.81 5.41 4.18 If you paid a total of $5,429.76 for General Electric bonds, what is their maturity value? (Round your answer to the nearest $1.)
The following table lists several corporate bonds. Treat these as zero coupon bonds, as in Example 2. Company AT&T Bank of America General Electric Goldman Sachs Verizon Wells Fargo Time to Maturity (years) 10 10 2 3 8 7 Annual Compound Interest Rate (%) 3.97 3.42 5.12 5.81 5.41 4.18 If you paid a total of $5,429.76 for General Electric bonds, what is their maturity value? (Round your answer to the nearest $1.)
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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The following table lists several corporate bonds. Treat these as zero coupon bonds, as in Example 2.
| Company | AT&T | Bank of America |
General Electric |
Goldman Sachs |
Verizon | Wells Fargo |
|---|---|---|---|---|---|---|
| Time to Maturity (years) |
10 | 10 | 2 | 3 | 8 | 7 |
| Annual Compound Interest Rate (%) |
3.97 | 3.42 | 5.12 | 5.81 | 5.41 | 4.18 |
If you paid a total of $5,429.76 for General Electric bonds, what is their maturity value? (Round your answer to the nearest $1.)
Expert Solution
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Step 1
Maturity Value
Maturity value is the sum that will be paid on a loan's due date or the sum that will be given to an investor at the conclusion of the investment's time frame.
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