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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 399 Weeks Ago, 1 Day Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
4.9Â Â Â Â Â Â Atari needs $4.5 million in new investment capital to develop and market downloadable games software for its new GPS2-ZX system. The plan is to sell $10,000 face-value corporate bonds at a discount of $9000 now. A bond pays a dividend each 6 months based on a bond interest rate of 5% per year with the $10,000 face value returned after 20 years. Will a purchase make at least 6% per year compounded semiannually?
4.10   Fairchild Industries issued 4% bonds some years ago. Carla’s grandfather told her he purchased one
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at a 5% discount when they were issued, and it has paid him $1000 each 3 months for the last 15 years. He told her that he just received the 60th dividend and he plans to sell the bond tomorrow for the face value and give her this money to help with college tuition and expenses.
a.  Determine the amount Carla will receive.
b.  Use the PW method to determine the number of years to maturity printed on the bond certifi- cate at issue time.
c.  Calculate the effective annual rate of return on this investment using a PW relation.
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