Question

As part of your inheritance, you received a bond that will pay interest of $700 every 6 months for 15 years. If the coupon rate is 7% per year, the face value of the bond is (a) $10,000 (b) $20,000 (c) $30,000 (d) $40,000

Name: as part of your inheritance you received a bond that will pay interest of 700 every 6 months for 15 years if the coupon rate is 7 per year the face value of the bond is a 10000 b 20000 c 300 40297
Uploaded: 2022-08-01T11:55:49-08:00
Duration: 2 min 30 s
Channel: Haricharan Gupta
Description: as part of your inheritance you received a bond that will pay interest of 700 every 6 months for 15 years if the coupon rate is 7 per year the face value of the bond is a 10000 b 20000 c 300 40297

          As part of your inheritance, you received a bond that will pay interest of $700 every 6 months for 15 years. If the coupon rate is 7% per year, the face value of the bond is (a) $10,000 (b) $20,000 (c) $30,000 (d) $40,000

Added by Randy C.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Haricharan Gupta

08/01/2022

Step 1

Given that the bond pays $700 every 6 months, the annual interest would be $700 * 2 = $1400. Show more…

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As part of your inheritance, you received a bond that will pay interest of $700 every 6 months for 15 years. If the coupon rate is 7% per year, the face value of the bond is (a) $10,000 (b) $20,000 (c) $30,000 (d) $40,000