Selling price amount = $ 60,000 What is the price?

Less brokerage fee of $ 200
What is the cost of the bonds?
what would be the gain on Sale?

what is the accrued interest

Amount = $ 60,000 x 7 and half interest rate x portion of year.

Please keep in mind the bond is sold 102 plus accrued interest at $ 60, 000.

bhet

divide the selling price of the bonds by 1.02 since it is the market value. the qoutient of the would be the face value of bonds.

accured inerest would be equal to the interest rate per month of the bond multiplied by the no. of months held.

Lmnstar

Thank you very much i got that part right.


I have another question
purchased a $50,000 of 8% U.S Treasury bond at 101 plus accured interest. Brokerage fee 125 interest dates are January 1 and July 1.
what would cash be?

bhet

multiply the fac value of the bond by 1.01. add accrued interest also add interest accrued if any. the total would be the purchase price. you didnt specify the date of acquisition of the bonds.

Lmnstar

the date of acquistion of the bond is Nov 1 what whould the accured interest be.

bhet

compute for the interest for the period of july 31 to nov 1. try to solve it first.