Asked by Elodie Charlorin on May 26, 2024
Verified
A $1,000 bond, with interest at 8 ½% on March 1 and September 1, was purchased on June 18 at 108 plus accrued interest. Compute the entire purchase cost of the bond. (Assume a 360-day year and a commission of $5 per bond.)
Purchase Cost
Purchase Cost is the total expense incurred to acquire an asset or service, including the price paid and any additional charges necessary to put it into use.
Accrued Interest
Interest that has been incurred but not yet paid, often referring to the interest accruing on a bond between payment periods.
- Determine the overall expenditure involved in buying a bond, accounting for accumulated interest and brokerage fees.
Verified Answer
SL
Learning Objectives
- Determine the overall expenditure involved in buying a bond, accounting for accumulated interest and brokerage fees.