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Find the total return earned by the bond with the characteristics shown in the table.Term to Maturity10 monthsFace Value$14.000Annual Interest Rate6.85%What is the total return earned by this bond?$(Round to the nearest cent as needed.)

Sagot :

Answer:

Explanations:

The total return earned by the bond can be derived by using the amount formula as shown:

[tex]\text{Amount = Face Value + Interest}[/tex]

Given the following parameters

Face value = $14,000

Rate (in %) = 6.85% = 0.0685

Time (in years) = 10 months = 10/12 years

Get the Interest

[tex]\begin{gathered} I=\text{PRT} \\ I=14,000\times0.0685\times\frac{10}{12} \\ I=\frac{9590}{12} \\ I=\$799.17 \end{gathered}[/tex]

Get the required t

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