On june 1, $40,000 of treasury bonds were purchased between interest dates. the broker commission was $600. the bonds pay interest at 12%, which is paid semiannually on january 1 and july 1. how much interest revenue will be recorded on july 1?

Question

Mathematics

Josiah Hardin

12 August, 10:41

On june 1, $40,000 of treasury bonds were purchased between interest dates. the broker commission was $600. the bonds pay interest at 12%, which is paid semiannually on january 1 and july 1. how much interest revenue will be recorded on july 1?

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Tiffany Mathis · Answer 1

Given:

treasury bond = 40,000

brokers commission = 600

interest rate = 12$ p. a

interest paid semi-annually, january 1 and july 1.

Since the treasury bond was sold on June 1, its interest revenue will only be equal to 1 month (June 1 to July 1).

12% / 12 months = 1% per month

40,000 * 1% = 400 interest revenue to be recorded on July 1.