making the assumption of no compounding interest, suppose you purchase a perpetuity bond from blue sun corporation for $3,000$3,000 with an annual coupon rate of 3%3% . specify all answers to the nearest dollar, and assume a discount rate equal to that of the current interest rate. what is the yearly return on your $3,000$3,000 investment?

for $4,000 with a 3% yearly coupon rate. Assume a discount rate equal to the current interest rate and round up all responses to the closest dollar.

What exactly is a compound frequency?

The frequency at which interest is compounded on top of the principal is referred to as compounding frequency. If we were to adopt annual compounding and apply the 7% interest example, you would simply add 7% to the principle once every year.

What are typical compounding frequencies?

"Intra-year compounding" is the process of compounding interest more frequently than once annually. On a semi-annual, quarterly, monthly, daily, or even continuous basis, interest may compound. Calculations of future and present values are both impacted by interest that is compounded more frequently than once annually.

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