An investor purchases a 12-year, $1,000 par value bond that pays semiannual interest of $50. If the semiannual market rate of interest is 6%, what is the current market value of the bond

the present value of the bond is $16.67

Explanation:

given data

time NPER = 12 year = 12 × 2 = 24 semi annual

bond value FV  = $1000

interest PMT = $50

rate of interest = 6% = = 0.03 = 3 % semi annual

solution

we will apply here formula for current value in excel as given below

-PV(Rate;NPER;PMT;FV;type)    .............1

put here value as

rate = 3% and NPER = 24 , and FV = 1000 and PMT = $50

solve it we get

the present value of the bond is $16.67

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

answer; blank(1); /rises; blank(2); //increases;