Asked by Shaima Albusaidi on May 25, 2024
Verified
A $1,000 bond, with interest at 8 ½% on January 1 and July 1, was purchased on September 30 at 97 plus accrued interest. Compute the entire purchase cost of the bond. (Assume a 360-day year and a commission of $5 per bond.)
Accrued Interest
Interest that has accumulated but remains unpaid.
360-Day Year
A financial convention that simplifies interest calculation by assuming a year has 360 days.
Commission
A fee paid for services, usually a percentage of the total cost.
- Compute the aggregate cost of bond acquisitions, factoring in premiums, commissions, and accumulated interest.
Verified Answer
IG
Learning Objectives
- Compute the aggregate cost of bond acquisitions, factoring in premiums, commissions, and accumulated interest.