SOLUTION: suppose you buy a 5 year treasury bond face value 2,000 for a purchase of 1800. Assuming simple interest, what is the effective annual interest rate that you will earn when the bon
Algebra.Com
Question 1102781: suppose you buy a 5 year treasury bond face value 2,000 for a purchase of 1800. Assuming simple interest, what is the effective annual interest rate that you will earn when the bond matures?
Answer by jorel1380(3719) (Show Source): You can put this solution on YOUR website!
2000-1800=200
200/5=40
40/1800=0.02222222222222222222222222222222 or 2.22% effective annual yield
☺☺☺☺
RELATED QUESTIONS
Simple Interest
7. Suppose you purchase a six-year muni bond for $6000. The face... (answered by jorel555)
A T-bill is a type of bond that is sold at a discount over the face value. For example,... (answered by Theo)
A bond with a face value of $10,000 in ten years was purchased for 5,988. What is the... (answered by addingup)
On November 25, 2011, you could buy a 30 year U.S. Treasury bond for $10,000 that pays... (answered by Boreal)
EE savings bond is sold at half face value, US Treasury guarantees it will double in... (answered by stanbon)
A certain bond pays coupons of Php 5,000 every six months for:
Given:
Semi-annual... (answered by CPhill)
Determine the return for the buyer of a 7-year, 3% bond of PhP 500,000 face value if on... (answered by CPhill)
Determine the return for the buyer of a 7-year, 3% bond of PhP 500,000 face value if on... (answered by CPhill)
8. A savings bond came in two types. A simple interest bond for $100 that had a... (answered by JulietG)