Josh buys an $8000 10-year bond that has a coupon rate of 4.5 %. If he keeps the bond to maturity, how much interest will he collect?

Answers

Answer 1

Josh will collect $3600 in interest if he keeps the $8000 10-year bond with a 4.5% coupon rate to maturity.

To calculate the interest that Josh will collect from the 10-year bond with an $8000 face value and a coupon rate of 4.5%, we need to consider the annual interest payment and the total number of interest payments over the bond's lifespan.

The annual interest payment can be calculated by multiplying the face value of the bond ($8000) by the coupon rate (4.5%). This gives us an annual interest payment of $360 (8000 * 0.045).

Since the bond has a 10-year maturity, there will be a total of 10 interest payments over its lifespan. Therefore, the total interest Josh will collect can be calculated by multiplying the annual interest payment ($360) by the number of interest payments (10).

Total interest = Annual interest payment * Number of interest payments

Total interest = $360 * 10

Total interest = $3600

Therefore, if Josh keeps the bond to maturity, he will collect a total of $3600 in interest over the 10-year period.

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Related Questions

Wally's Walleyes wants to introduce a new product that has a start-up cost of $7,800. The product has a 2-year life and will provide cash flows of $4,500 in Year 1 and $4,300 in Year 2. The required rate of return is 15 percent. Should the product be introduced? Why or why not?

Answers

The calculated NPV is negative, indicating that the present value of expected cash flows does not exceed the start-up cost of the project. In other words, the project is expected to generate a net loss.

To determine whether Wally's Walleyes should introduce the new product, we can calculate the net present value (NPV) of the project. The NPV measures the present value of expected cash flows, taking into account the required rate of return.

To calculate the NPV, we need to discount the cash flows using the required rate of return (15 percent). The formula for calculating NPV is:

NPV = Cash Flow Year 1 / (1 + Required Rate of Return)^1 + Cash Flow Year 2 / (1 + Required Rate of Return)^2 - Start-up Cost

[tex]NPV = $4,500 / (1 + 0.15)^1 + $4,300 / (1 + 0.15)^2 - $7,800[/tex]

[tex]NPV = $4,500 / 1.15 + $4,300 / (1.15)^2 - $7,800[/tex]

NPV = $3,913.04 + $3,537.41 - $7,800

NPV = -$350.55

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what is the proper way to eat in class

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The proper way to eat in class is to follow the rules and teacher's instructions, choose quiet and odorless foods, eat discreetly, and be respectful of others.

1: Be mindful of the class rules and teacher's instructions. Different schools and teachers may have different policies regarding eating in class. Make sure you are aware of these rules before proceeding.

2: Choose appropriate foods. Opt for foods that are quiet, odorless, and easy to eat without making a mess. Avoid foods that are crunchy, smelly, or require utensils, as they may disrupt the class or distract other students.

3: Prepare in advance. If you know you will be hungry during class, have a small snack or meal before class starts to curb your hunger. This way, you won't be tempted to eat during the class session.

4: Eat discreetly. If you do need to eat something during class, do so discreetly. Choose a moment when the teacher is not actively speaking or when there is a break in the lesson. Take small, quiet bites and avoid making unnecessary noise.

5: Be respectful of others. Ensure that your eating habits do not disturb or distract your classmates. Avoid chewing loudly, slurping drinks, or engaging in messy eating habits. Keep your focus on the class material while eating.

6: Clean up after yourself. Dispose of any food wrappers or containers properly in designated trash cans. If you accidentally make a mess, clean it up discreetly and quickly to avoid drawing attention.

7: Follow teacher's instructions. If your teacher explicitly prohibits eating in class, respect their rules and refrain from eating until an appropriate time, such as during designated breaks or lunchtime.

Remember, the primary purpose of being in class is to learn and engage in educational activities. Eating should only be done when necessary and in a manner that does not disrupt the learning environment.

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b) Find the standard deviation and the coefficient of variation of the following data. 25 Marks Interval Frequency Interval Frequency 3.00-3.25 6 4.00-4.25 47 3.25-3.50 19 4.25-4.50 29 3.50-3.75 35 4.50-4.75 15 3.75-4.00 44 4.75-5.00 5

Answers

The standard deviation is 0.4182 and the coefficient of variation is 10.5%.

Given the following data Interval Frequency 3.00-3.25 64.00-4.25 473.25-3.50 194.25-4.50 293.50-3.75 354.50-4.75 153.75-4.00 445.00-4.75 5 The formula for finding the standard deviation is:[tex]$$ \sigma =\sqrt{ \frac{\sum f(x-\overline{x})^2}{N}} $$[/tex]

The table below shows the calculation; Interval [tex]$X$ Midpoint ($X_i$)[/tex] Frequency [tex]($f$) $x-\bar{x}$ $f(x-\bar{x})$ $(x-\bar{x})^2$ $f(x-\bar{x})^2[/tex]

$3.00-3.25 3.125 6 -0.725 -4.35 0.525625 3.153.25-3.50 3.375 19 -0.475 -9.025 0.225625 4.279.50-3.75 3.625 35 -0.225 -7.875 0.050625 1.773.75-4.00 3.875 44 0.025 1.1 0.000625 0.274.00-4.25 4.125 47 0.275 12.925 0.075625 3.554.25-4.50 4.375 29 0.525 15.225 0.275625 7.994.50-4.75 4.625 15 0.775 11.625 0.600625 9.01.75-4.00 4.875 5 1.025 5.125 1.050625 5.25 [tex]$\sum f=200$  $\sum f(x-\bar{x})= 3.15$  $\sum f(x-\bar{x})^2= 35.01$[/tex]

The variance is: [tex]$ \sigma^2 =\frac{\sum f(x-\overline{x})^2}{N} $$\sigma^2=\frac{35.01}{200}=0.1751$[/tex]

Therefore, the standard deviation is: [tex]$$ \sigma=\sqrt{ \sigma^2} $$$ \sigma=\sqrt{ 0.1751}=0.4182$[/tex]

The formula for finding the coefficient of variation is:$$ C.V = [tex]\frac{\sigma}{\overline{x}} \times 100\% $$[/tex]

The coefficient of variation is:$$ C.V = [tex]\frac{0.4182}{3.985} \times 100\% $$$C.V = 10.5\%$[/tex]

Therefore, the standard deviation is 0.4182 and the coefficient of variation is 10.5%.

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