You are considering buying a 30 year bond issued by Microsoft for $95.00. The bond has a par value of $100 and pays a coupon of 7.5% annually. How much interest on interest are you likely to earn on the bond? $225.00 $615.33 $840.33

You are considering buying a 30 year bond issued by Microsoft for $95.00. The bond has a par value of $100 and pays a coupon of 7.5% annually. How much interest on interest are you likely to earn on the bond? $225.00 $615.33 $840.33

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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Question

You are considering buying a 30 year bond issued by Microsoft for $95.00. The
bond has a par value of $100 and pays a coupon of 7.5% annually.
How much interest on interest are you likely to earn on the bond?
$225.00
$615.33
$840.33

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