Asked by Neisha Bethly on May 09, 2024
Verified
Two $1,000 bonds, with interest at 8% on March 1 and September 1, were purchased on October 8 at 104 plus accrued interest. Compute the entire purchase cost of the bonds. (Assume a 360-day year and a commission of $5 per bond.)
Purchase Cost
The total expense incurred to acquire an asset, including the purchase price and associated costs.
360-Day Year
A financial convention or simplification to treat all months as 30 days in duration for the ease of interest calculations and financial analysis.
Commission
A fee or percentage of a sale paid to an employee or agent for facilitating or completing a sale.
- Calculate total purchase cost of bonds including premium, commission, and accrued interest.
Verified Answer
KS
Learning Objectives
- Calculate total purchase cost of bonds including premium, commission, and accrued interest.