You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous ownreceived a semiannual interest payment. The bond rate is 6.6% per year payable semiannually. You plan to hold the bond for 7 years,selling the bond immediately after you receive the interest payment. If you desired nominal yield is 4.5% per year compoundedsemiannually, what will be your minimum selling price for the bond? $Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±5.

The minimum selling price is that price which gives the minimum acceptable rate of return.The…

Answered: You have just purchased a municipal…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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The house you find that would accommodate your growing family costs $295,000. You obtain a 30-year conventional mortgage at 6.75% after paying a down payment of 25% of the purchase price. Of the first month’s payment, how much is interest and how much is applied to principal?
if a loan's annual simple discount rate is 4.34%, how many years would it take for the debt to double?
Joe secured a loan of $10,000 three years ago from a bank for use toward his college expenses. The bank charges interest at the rate of 3%/year compounded monthly on his loan. Now that he has graduated from college, Joe wishes to repay the loan by amortizing it through monthly payments over 13 years at the same interest rate. Find the size of the monthly payments he will be required to make.
You have just borrowed 130,000, and you agree to pay it back over the next 30 years in 30 equal end-of-year payments plus 8 percent compound interest on the unpaid balance. What will be the size of these payments?
Lucas purchases a 3,000 par value 12-year bond with 3% semiannual coupons for 2,760. He is able to reinvest his coupon payments at a nominal rate of 4% convertible semiannually. Calculate his nominal annual yield rate convertible semiannually over the 12-year period.
Assume that you want to have $ 3100 saved in a sinking fund in 1 year. The account pays 4.5% compounded monthly. What should be your monthly payments?
A $5000 bond with a coupon rate of 6.25% and redeemable in two years was purchased when the yield rate was 7.75% compounded semi-annually. Construct the bond schedule showing the accumulation of discount.

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