Question
Suppose () buys of bonds at a price of. The bonds pay cash interest at the annual rate of % and mature at the end
Suppose () buys of bonds at a price of. The bonds pay cash interest at the annual rate of % and mature at the end of five years. Required 1. How much did pay to purchase the bond investment? How much will collect when the bond investment matures? 2. How much cash interest will receive each year from? 3. Will 's annual interest revenue on the bond investment be more or less than the amount of cash interest received each year? Give your reason. 4. Compute 's first-year interest revenue on this bond investment. Use the effective interest of % to amortize the investment.
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