Hal Fritz purchased a $5,000 bond at 95. The annual interest is 6%.What was the cost of the bond? What was the annual interest? What is the yield (to nearest tenth of a percent)? please help
Hal Fritz purchased a $5,000 bond at 95. The annual interest is 6%.
What was the cost of the bond? $ 4750.00
What was the annual interest? $ 300.00
What is the yield (to nearest tenth of a percent)? 6.3 %
I need an answer to this also.
To determine the cost of the bond, we need to calculate 95% of the face value of the bond.
Step 1: Convert the given percentage to decimal form:
95% = 0.95
Step 2: Multiply the decimal by the face value of the bond:
Cost of the bond = 0.95 * $5,000 = $4,750
Therefore, the cost of the bond is $4,750.
To calculate the annual interest, we can use the following formula:
Annual interest = (Interest Rate / 100) * Face Value
Step 1: Convert the given interest rate to decimal form:
6% = 0.06
Step 2: Multiply the decimal by the face value of the bond:
Annual interest = 0.06 * $5,000 = $300
Therefore, the annual interest is $300.
To calculate the yield, we can use the following formula:
Yield = (Annual Interest / Cost of the bond) * 100
Step 1: Divide the annual interest by the cost of the bond:
Yield = ($300 / $4,750) * 100
Step 2: Calculate the yield:
Yield = 6.32 (rounded to the nearest tenth of a percent)
Therefore, the yield of the bond is approximately 6.3%.
To find the cost of the bond, you need to multiply the face value of the bond by the purchase price percentage.
Cost of the bond = Face value of the bond * Purchase price percentage
Given that the face value of the bond is $5,000 and the purchase price is 95, you can calculate the cost of the bond as follows:
Cost of the bond = $5,000 * (95/100) = $4,750
So, the cost of the bond is $4,750.
To find the annual interest, you need to multiply the cost of the bond by the annual interest rate.
Annual interest = Cost of the bond * Annual interest rate
Given that the cost of the bond is $4,750 and the annual interest rate is 6%, you can calculate the annual interest as follows:
Annual interest = $4,750 * (6/100) = $285
So, the annual interest is $285.
To calculate the yield (to the nearest tenth of a percent), you need to divide the annual interest by the cost of the bond and multiply by 100.
Yield = (Annual interest / Cost of the bond) * 100
Given that the annual interest is $285 and the cost of the bond is $4,750, you can calculate the yield as follows:
Yield = ($285 / $4,750) * 100 ≈ 6.0%
So, the yield (to the nearest tenth of a percent) is approximately 6.0%.