Sunland Real Estate Company management is planning to fund a development project by issuing 10-year zero coupon bonds with a face value of $1,000. Assuming semiannual compounding, what will be the price of these bonds if the appropriate discount rate is 9.8 percent?

$384.141

Explanation:

Given the following :

Discount rate (r) = 9.8%

Semi-annual compounding

Face value = $1000

Period (t) = 10 years

Price of zero-coupon bond (P) :

Face value / ( 1 + r)^t

r =. 9.8%, compounded semianually

r = (9.8 / 100) = 0.098 / 2 = 0.049

Period (t) = 10 * 2 = 20

P = 1000 / (1 + 0.049)^20

P = 1000 / 1.049^20

P = 1000 / 2.6032

P = 384.14062

P = $384.141 ( 3 decimal places)

answer; /// the correct answer is (10) days; /// good luck

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.