Purchase price?

Question

On September 6, Irene Westing purchased one bond of Mick Corporation at 93.00. The bond pays 6.5 interest on June 1 and December 1. The stockbroker told Irene that she would have to pay the accrued interest and the market price of the bond and a $5 brokerage fee.

What was the total purchase price for Irene? Assume a 360-day year (each month is 30 days) in calculating the accrued interest. (Hint: Final cost = Cost of bond + Accrued interest + Brokerage fee. Calculate time for accrued interest.) (Round your answer to the nearest cent.)

Answer 1

Answer: $953.13

 

Bond issued @ 93%  

assume: discounted Bond market price  $930

Accrued interest  $18.13 (bond face value 1000*96 days*.00018889)

Brokerage Fee  $5