Calculate the may 1 and November 1 INTEREST PAYMENT each year (5 years) create the column and row heading

Question

You recently purchased a 5-year, $10,000 corporate bond with 6.0% APY.

Answer 1

The Annual Percentage Yield (APY) is calculated using the following formula:

APY = (1 + r)/  -1

r  = stated annual interest rate

n = nos of compounding periods each year

APY takes account of compound interest and it is greater than periodic interest. It is calculated annually.

APY = (1 + 0.06)^2 -1) =

0.1236 *100 = $12.36

If the corporate bond pays $12.36 in interest on $10,000 bond (where 6 months contains 182 days) use this formula to calculate semi- annual yield:

APY = 100[(1 + 12.36/10,000) (365/182) -1]

Years	Starting balance	Interest earned	Ending balance
Year 1(May-Nov)	10,000