Last month jim purchased $10,000 of u. s. treasury bonds (their face value was $10,000). these bonds have a 30-year maturity period, and they pay 1.5%interest every threemonths (i. e., theapris 6%, and jim receives a check for $150 every three months). but interest rates for similar securities have since risen to a 7% apr because of interest rate increases by the federal reserve board. in view of the interest-rate increase to 7%, what is the current value of jim’s bonds?

current value is $8749.57

Explanation:

given data

face value = $10,000

maturity period = 30 = 30 × 4 = 120

interest = 1.5% every 3 month

solution

we will apply here bond price formula that is

bond price = coupon ×          ............................1

here r is rate and n is no of period and

so rate = = 1.75% = 0.0175

and  coupon is $150

put here value

bond price = $150 ×  

bond price = 8749.57

so current value is $8749.57

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

bioteacher101

hi there, i would say your answer is:

b. there is a fixed quantity of resources and technology available.

hope that : )