Use the following bond quotes to answer this question:

-If you purchase five Zeus bonds,the cost will be ________ and the annual interest income will be ________.
A) $5,000.00; $388.75
B) $5,000.00; $412.50
C) $5,000.00; $460.00
D) $5,101.50; $412.50
E) $5,101.50; $460.00

Question

Use the following bond quotes to answer this question:
 
-If you purchase five Zeus bonds,the cost will be ________ and the annual interest income will be ________.
A) $5,000.00; $388.75 
B) $5,000.00; $412.50 
C) $5,000.00; $460.00 
D) $5,101.50; $412.50 
E) $5,101.50; $460.00

Quizplus · Accepted Answer

Cost = 5 × (1.0203 × $1,000) = $5,101.50
Annual interest income = 5 × (.0825 × $1,000) = $412.50

Use the Following Bond Quotes to Answer This Question