Homework Help: economics

Posted by anonymous on Monday, December 10, 2007 at 1:03am.

Suppose that you buy a bond for $100 that pays 4 percent interest per year. How much money will you have earned when the bond reaches maturity in five years?

economics - economyst, Monday, December 10, 2007 at 9:16am
Assuming that the bond is a simple-interest bond..... In year 1, the bond pays 100*.04=$4. In year 2 the bond again pays $4. In each of the years 3,4, and 5 the bond pays $4. So, over 5 years, the bond pays.....

(Note that some bonds pay compounding interest (the "interest payments" are rolled into the bond). This results in greater earnings on the bond.
economics - d, Wednesday, May 19, 2010 at 2:08am
4
economics - d, Wednesday, May 19, 2010 at 2:08am
4

Answer this Question

Related Questions

Math - A woman has a total of $9000 to invest. She invests part of the money in ...
math - A woman has a total of $9,000 to invest. She invests part of the money in...
math - ...A woman has a total of $9,000 to invest. She invests part of the ...
math - Mr. Wilson invested money in two accounts. His total investment was $40,...
bond valuation - Bond valuation The Garraty Company has two bond issues ...
bond valuation - Bond valuation The Garraty Company has two bond issues ...
math - Formulate but do not solve the problem. Michael Perez has a total of $...
pre-algebra - You split $1500 between two savings accounts. Account A pays ...
Math - Kent invested $5,000 in a retirement plan.He allocated X dollars of the ...
COLLEGE MATH- SYSTEMS OF EQUATIONS - 1. Solve these systems of equations a. 3x...

For Further Reading

First Name:
School Subject:
Answer: