Explore BrainMass
Share

Money & Banking

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

In Table 5.5, show the derivation of each of the following entries:

a The interest rate of 5.1 percent on a bond sold in 2011 that matures in 7 years.

b The interest rate of 4.4 percent on a bond sold in 2014 that matures in 5 years.

c The interest rate of 4.5 percent on a bond sold in 2018 that matures in 2 years.

Table 5.5 is as following:

Date 1 2 3 4 5 6 7 8 9 10
2011 5.0 5.5 6.0 6.0 5.8 5.5 5.1 5.0 5.0 5.1
2012 6.0 6.5 6.3 6.0 5.6 5.2 5.0 5.0 5.1
2013 7.0 6.5 6.0 5.5 5.0 4.8 4.9 5.0
2014 6.0 5.5 5.0 4.5 4.4 4.5 4.7
2015 5.0 4.5 4.0 4.0 4.2 4.5
2016 4.0 3.5 3.7 4.0 4.4
2017 3.0 3.5 4.0 4.5
2018 4.0 4.5 5.0
2019 5.0 5.5
2020 6.0

© BrainMass Inc. brainmass.com October 15, 2018, 6:29 am ad1c9bdddf - https://brainmass.com/economics/bonds/money-banking-492116

Solution Preview

We're showing how the interest rate is calculated for each of the ...

Solution Summary

In Table 5.5, show the derivation of each of the following entries:

a The interest rate of 5.1 percent on a bond sold in 2011 that matures in 7 years.

b The interest rate of 4.4 percent on a bond sold in 2014 that matures in 5 years.

c The interest rate of 4.5 percent on a bond sold in 2018 that matures in 2 years.

$2.19