Question

Find the total return earned by the bond with the characteristics shown in the table.Term to Maturity10 monthsFace Value$14.000Annual Interest Rate6.85%What is the total return earned by this bond?$(Round to the nearest cent as needed.)

Answer 1

Explanations:

The total return earned by the bond can be derived by using the amount formula as shown:

`\text{Amount = Face Value + Interest}`

Given the following parameters

Face value = $14,000

Rate (in %) = 6.85% = 0.0685

Time (in years) = 10 months = 10/12 years

Get the Interest

`\begin{gathered} I=\text{PRT} \\ I=14,000*0.0685*(10)/(12) \\ I=(9590)/(12) \\ I=\$799.17 \end{gathered}`

Get the required t