You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous owner received a semiannual interest payment. The bond rate is 6.6% per year payable semiannually. You plan to hold the bond for 5 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 4% per year compounded semiannually, what will be your minimum selling price for the bond? $

You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous owner received a semiannual interest payment. The bond rate is 6.6% per year payable semiannually. You plan to hold the bond for 5 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 4% per year compounded semiannually, what will be your minimum selling price for the bond? $

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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You have purchased a guaranteed investment contract (GIC) from an insurance firm that promises to pay you a 5% compound rate of return per year for 6 years. If you pay $20,000 for the GIC today and receive no interest along the way, you will get __________ in 6 years (to the nearest dollar). (Round your answer to the nearest whole dollar).
You took out a $200,000 mortgage for 30 years. The contract rate is tied to the one-year U.S. treasury rate (index rate). The fixed risk premium for your mortgage is 9%. Your interest rate will be adjusted every year. For the first year, the index rate is 1.5%. What is the outstanding principal at the end of year 1? $95,758 $198,999 $197,769 $96,726
Please do both correctly, I'll rate the answer Question: (i) A $10,000 bond is purchased for $9600 and has a bond rate of 6% per year payable semiannually for 2 years. What is the interest rate? (ii) You borrow 35,000 for 10 years at 10% per year compounded monthly. After making 24 payments you decide to pay the loan off. What's that payoff amount?
Suppose that you take out an unsubsidized Stafford loan on September 1 before your junior year for $45004500 and plan to begin paying it back on December 1 after graduation and grace period 27 months later. The interest rate is 6.8%. How much of what you will owe will be interest?$Round your answer to the nearest cent.
You borrow a balloon mortgage loan of $200,000 at 8% rate for 30 years with monthly payments, the loan is partially amortized and the balloon payment of $100,000 is scheduled at the end of year 30. The outstanding loan balance if the loan is repaid at the end of year 5?
A borrower and lender negotiate a $38,000,000 interest-only loan at a 6.0 percent interest rate for a term of 15 years. There is a lockout period of 10 years. Should the borrower choose to prepay this loan at any time after the end of the 10th year, a yield maintenance fee (YMF) will be charged. The YMF will be calculated as follows: A treasury security with a maturity equal to the number of months remaining on the loan will be selected, to which a spread of 150 basis points (1.50%) will be added to determine the lender's reinvestment rate. The penalty will be determined as the present value of the difference between the original loan rate and the lender's reinvestment rate. Required: a. How much will the YMF be if the loan is repaid at the end of year 13 if two year treasury rates are 3 percent? If two-year treasury rates are 5.0 percent, what will be the lender's reinvestment rate? Note: Do not round intermediate calculations, Round "YMF" to the nearest dollar amount. Enter…
On January 1 2021, you will purchase a $350,000 house. To pay for the house you will pay 20% down (in Cash) and borrow the remainder under a 30 year mortgage with a contractual interest rate of 3.35% Your market rate of interest, for the risk you pose, is 4.5% Your payments are due at the end of each month with the first payment due 1/31/2021. How much interest (rounded to the nearest dollar) will you repay during the time period of 2022-2025 ((the second through fifth year of the loan))
As a graduating senior with a promising career in finance, Central Bank offers you a mortgage of $200,000. You may choose between a 30-year mortgage with an interest rate of 4.375% or a 15-year mortgage at 3.500%. Both interest rates are annual stated rates with interest compounded monthly. Assume that for 30-year mortgage, the bank requires you to pay 1% point. Compute an amortization table that shows the amount of interest you can report for taxes and amount of principal payment each year for each loan. Use two different ways to do it as we did in class: with and without using the functions PPMT and IPMT. PLEASE USE EXCEL and show functions.
You have just purchased a new warehouse. To finance the purchase, you've arranged for a 25-year mortgage for 80 percent of the $1,800,000 purchase price. The monthly payment on this loan will be $10,800. What is the APR? The EAR? A. 7.67 percent; 7.94 percent B. 7.67 percent; 8.03 percent C. 7.72 percent; 7.94 percent D. 7.72 percent; 8.03 percent E. 7.75 percent; 8.03 percent
You wish to purchase a $1,000 bond from a friend who needs the money. There are 7 years remaining until the bond matures, and interest payments are quarterly. You decide to offer $750.08 for the bond because you want to earn exactly 16% per year compounded quarterly on the investment. What is the annual bond rate of interest?
Please do both correctly, I'll rate the answerQuestion:(i) A $10,000 bond is purchased for $9600 and has a bond rate of 6% per year payable semiannually for 2 years. What is the interest rate?(ii) You borrow 35,000 for 10 years at 10% per year compounded monthly. After making 24 payments you decide to pay the loan off. What's that payoff amount? Note:- please dont use pen paper

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