Assuming simple annual compounding, how much should you pay for a one-year bond with a stated interest
Fantastic news! We've Found the answer you've been seeking!
Question:
Assuming simple annual compounding, how much should you pay for a one-year bond with a stated interest rate of 5 percent and a face value of $1,000 if you want to earn a return of 5 percent? What is the maximum you would be willing to pay if you want to earn a return of 8 percent? What is the maximum you would be willing to pay if you require a return of 4 percent?
Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
Posted Date: