Asked by Miranda A. Davis on May 19, 2024
Verified
A $1,000 bond, with interest at 9% on March 1 and September 1, was purchased on November 4 at 107 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
The total expenditure incurred to acquire a good or service, including the purchase price and additional expenses.
Accrued Interest
Interest that has been earned but not yet received or paid out, commonly associated with bonds and loans.
Commission
Payment to an employee or to an agent for performing or helping to perform a business transaction or service.
- Calculate the total cost of purchasing a bond, including accrued interest and commission.
Verified Answer
AM
Learning Objectives
- Calculate the total cost of purchasing a bond, including accrued interest and commission.