You bought a bond five years ago for $880 per bond. The bond is now selling for $920. It also paid $60 in interest per year, which you reinvested in the bond. Calculate the realized rate of return earned on this bond

Q: when you initially purchased it? assuming the bond earned 3.97 percent annually, approximately how…

A: EEBonds are issued by government and these bonds are issued at half cost and will double in prices…

Q: Assume that you purchased a $10,000 corporate bond. The interest rate is 7.00 percent. What is the…

A: Bond purchased amount (FV) = $10,000Interest rate = 7.00%

Q: Suppose you bought a bond with an annual coupon of 6 percent one year ago for $1,170. The bond sells…

A: The answer is in the explanation.Explanation:1. Coupon Payment Calculation:  - Coupon Rate: 6% or…

Q: You own a 20-year, $12,000 bond issued by the National Widget Company of America, and you'd like to…

A:

Q: Hello,I need help with the following question.On March 1, 2011, someone purchased 60K bond for 17…

A: Bond is a formal debt instrument that obligates the borrower to repay a stated amount, referred to…

Q: You have purchased a 14 year $1000 per value bond. The annual coupon rate on the bond is 9.7% paid…

A: d. 802. 67Explanation:Step 1: Calculate the present value of the annuity (coupon payments) using the…

Q: 10. Determining Interest and Approximate Bond Value. Assume that three years ago, you purchased a…

A:

Q: You are thinking about buying a savings bond. The bond costs $42 today and will mature in 13 years…

A: Principal amount invested now will become certain amount after certain period of time at specific…

Q: You are thinking about buying a savings bond. The bond costs $48 The bond will earn an annual rate…

A: Present Value = pv = $ 48Time = t = 12 YearsFuture Value = fv = $ 98

Q: 3. You have the option of investing money in a bond that will help to grow your money. Bond A offers…

A: Effective annual rate is the interest actually earned on the investment or paid on the loan, as a…

Q: The Johnson National Bank has purchased a bond that has a coupon rate of 5.5% and a face value of…

A: The duration of a bond refers to the time it takes for the cash flows of the bond to cover the…

Q: Calculate the realized rate of return earned on a bond bought five years ago for $833 which is now…

A: The realized rate of return for a bond refers to the return that the bondholder receives based on…

Q: A savvy investor paid $5,000 for a 20-year $10,000 mortgage bond that had a bond interest rate of 2%…

A: Given: Particulars Amount   Invested $5,000   Year 20   Mortgage $10,000   Interest rate…

Q: A corporation issues a bond that promises to pay you monthly coupons in the amount of $ 77.5 per…

A: Bond price refers to the market value at which a bond is traded. It represents the present value of…

Q: You purchased a bond at a price of $800. In 15 years when the bond matures, the bond will be worth…

A: A bond reveals the debt instrument that allows the issuer to raise funds from the public. The holder…

Q: How much did an old $14,800 EE savings bond cost when you initially purchased it? Assuming the bond…

A: NPER is a function commonly used in  Excel. The NPER function is used to calculate the number of…

Q: Imagine that a $10,000 ten-year bond was issued at an interest rate of 6%. You are thinking about…

A: Using excel PV function to calculate the amount you will be willing to pay for this bond.

Q: 2. Rick bought a 30-year bond when it was issued by Macroflex Corporation 8 years ago. The bond has…

A: The question is based on the concept of Bond Valuation. As per Bartleby guidelines we are allowed to…

Q: Navistar Electric issued 1000 debenture bonds 5 years ago with a face value of $5,000 each and a…

A: A Bond is an instrument that represents the loan that is made by the investor to the company and…

Q: Suppose a pure discount State of New York bond will pay $1,000 ten years from now. If the going…

A: A financial instrument that has a fixed income and also helps a company to raise funds for business…

Q: Ten years ago your grandfather purchased for you a 25-year $1,000 bond with a coupon rate of 9…

A: Market price of bond is based on present value of periodic interest and maturity amount discounted…

Q: Five years ago you purchasedan 8% coupon bond for $975. Today you sold the bond for $1,000. What is…

A: a. Calculate the rate of return as follows: rate of return=Sale price of bond+Coupon…

Q: Refer to Table 10-1, assume interest rates in the market (yield to maturity) are 12 percent for 20…

A: Bond price is referred to  the price which is calculated on the basis of coupon amounts and…

Q: Suppose Ford Motor Company issues a five year bond with a face value of $5,000 that pays an annual…

A: Bonds are the financial instruments that are used by the financial institutions to raise capitals…

Q: You are considering a savings bond that will pay $100 in 8 years. If the interest rate is 2.2%, what…

A: The objective of this question is to find out the present value of a savings bond that will pay $100…

Q: I bought a $10,000 bond at 6% interest a year ago. What does the cash flow diagram look like today?…

A: Calculations for the present value: Present value with a current interest rate of 6%: PV = $10,000 /…

Q: The bond will earn an annual rate of %. (Round to two decimal places.)

A: An investment that simulates a debt commitment is called a bond. A government, municipality,…

Q: You purchased a bond at a price of $2,100. In 30 years when the bond matures, the bond will be worth…

A: Rate of return is amount of profit earned on investment based on initial investment.Purchase price…

Q: You purchased a bond at a price of $1,400. In 25 years when the bond matures, the bond will be worth…

A: Sure, here's the calculation presented in a clear format:Calculate Total Return:Ending Value (Value…

Q: What is its YTC?

A: Yield to call (YTC) refers to the return earned or received by the bondholders on the bonds held by…

Q: 4.   You bought a 10-year, 5% coupon bond for $1,000 and sold it 1 year later for $1,100. What is…

A: The holding period rate of return would be calculated by using the following formula:Rate of…

Q: rate on these 10-year bonds is 4.9%, how much is the a) with annual compounding

A: Given information : Expected amount to be paid  $1,000.00 Time to be paid (years) 10 Interest…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.