A municipal bond with a face value of $10,000 and bond interest rate of 8% per year payable quarterly has a maturity date of 30 years from the date of issue. If the bond was issued 10 years ago and an investor wishes to make a rate of return of at least 12% per year, compounded quarterly, the amount the investor should pay for the bond is approximately 1) $6,000
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- A $1,000 face value bond issued by the Purdue Company currently pays total annual interest of $80 per year and has a 15-year life. a-What is the present value, or worth, of this bond if investors are willing to accept a 10 percent annual rate of return on bonds of similar quality bond? b. How would your answer change is the bond makes semi-annual payments? c-How would your answer in (a) change if, one year from now, investors only required a 6 percent annual rate of return on bond investments similar in quality to the Purdue bond? d-Suppose the original bond can be purchased for $925. What is the bond’s yield to maturity?Need Solutions ASAP... A 10-year, $20,000 bond was issued at a nominal interest rate of 8% with semiannual compounding. Just after the fourth interest payment, the bond will be sold. Assume that an effective interest rate of 10 (1/4)% will apply, and calculate the price of the bond. (Answer: $17,832)Suppose a State of New York bond will pay $1,000 ten years from now. If the going interest rate on these 10-year bonds is 5.0%, how much is the bond worth today? Select one: a. $564.80 b. $466.57 c. $613.91 d. $736.70 e. $724.42
- You intend to purchase a 10-year, $1,000 face value bond that pays interest of $60 every 6 months. If your nominal annual required rate of return is 10 percent with semiannual compounding, how much should you be willing to pay for this bond? Select one: O a. $1,124.62 O b. $1,086.15 O c. $ 957.50 O d. $826.31 O e. $1,032.20Suppose a Puerto Rico government bond pays $3,255.80 in 4 years at 4% interest. Calculate the present value of the bond. Determine the value of the bond assuming it will mature in 6 years at 5% interest.Assume a corporation issue a $2 million bond to finance its new project. The bond pays an 8% semiannual interest rate and will mature in 10 years. The current interest rate for this bond is 6%. What is the price of this bond?
- 2. A 10-year, P20,000 bond was issued at a nominal interest rate of 8% with semiannual compounding. Just after the fourth interest payment, the bond will be sold. Assume that an effective interest rate of 10 % % will apply, and calculate the price of the bond.Suppose a State of New Jersey bond will pay $1,000 five years from now. If the going interest rate on these 10-year bonds is 4.1%, how much is the bond worth today? 1. $675.79 2. $817.99 3. $628.96 4. $749.39 5. $669.10A $1,000 face value bond issued by the Purud Company currently pays total annual interest of $80 per year and has a 13-year life. a-What is the present value, or worth, of this bond if investors are willing to accept a 10 percent annual rate of return on bonds of similar quality if the bond is a Eurobond? b-How would your answer in (a) change if the bond is a U.S. bond? c-How would your answer in (b) change if, one year from now, investors only required a 6 percent annual rate of return on bond investments similar in quality to the Purud bond? d-Suppose the original bond can be purchased for $925. What is the bond's yield to maturity?
- A 20-year bond with a face value of P 5,000 is offered for sale at P 3,800. The nominal rate of interest on the bond is 7%, paid semi-annually. This bond is now 8 years old (i.e., the owner has received 16 semiannual interest payments). If the bond is purchased for P 3,800, What effective annual rate of interest would be realized on this investment opportunity?The following information applies to this question: Johnson Corporation plans to obtain financing with a $1,000,000 bond issue that has a term of 10 years. Payments wilI be made semi-annually. if the bond (payment) rate is stated at 7%, and the bonds call for semi-annual payments, what is the amount of those payments? O a. $350,000 O b. $70,000 OC. $35,000 d. $700,000You intend to purchase a 9-year, $1,000 face value bond that pays interest of $65 every 6 months. If your nominal annual required rate of return is 11.6 percent with semiannual compounding, how much should you be willing to pay for this bond? $1,106.94 $1,076.94 $1,086.94 $1,096.94 $1,066.94