Question: Connect Problem CP 1 6 - 0 8 ( algo ) Suppose that you invested $ 9 , 0 0 0 in a corporate bond

Connect Problem CP

16 - 08 (

algo

)

Suppose that you invested $

9, 000

in a corporate bond

12

years ago and have been receiving annual payments of $

750

on the bond.

You will continue to receive annual payments of this same amount for the next

3

years, after which time you will also receive a

payment equal to your initial investment as your final payment. Suppose another investor is interested in purchasing the bond from

you. What is the minimum price you should accept for the bond if the current rate of interest for similar investments is

8

percent?

Instructions: Round your answer to the nearest dollar. Do not round your intermediate calculations for

(1 + i)^{t} .

Minimum price

=

$Suppose that you invested $

9, 000

in a corporate bond

12

years ago and have been receiving annual payments of $

750

on the bond. You will continue to receive annual payments of this same amount for the next

3

years, after which time you will also receive a payment equal to your initial investment as your final payment. Suppose another investor is interested in purchasing the bond from you. What is the minimum price you should accept for the bond if the current rate of interest for similar investments is

8

percent?

Connect Problem CP 16-08(algo) Suppose that you invested $9,000 in a

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