So im having a test on simple interest this coming week, the problem is I have no clue how to solve them.
a) If you have a $1000 bond with a coupon of 6.7%, what formula would you use to calculate how much you get paid every 6 months?
b)Suppose you buy a bond for $1000 with a 5% coupon in 2010. If the government begins selling $1000 bonds with 5.5% coupons in 2011, is your bond worth more or less than its face value when you try to sell it on the market?
please answer AND explain thouroughly. We were just introduced to economics this semester and I was doing fine until they just started to add math in there. Math is my worst subject and I really really want to do extreamly well in this course, so please answer and explain well!
a) If you have a $1000 bond with a coupon of 6.7%, what formula would you use to calculate how much you get paid every 6 months?
b)Suppose you buy a bond for $1000 with a 5% coupon in 2010. If the government begins selling $1000 bonds with 5.5% coupons in 2011, is your bond worth more or less than its face value when you try to sell it on the market?
please answer AND explain thouroughly. We were just introduced to economics this semester and I was doing fine until they just started to add math in there. Math is my worst subject and I really really want to do extreamly well in this course, so please answer and explain well!