Question
A company issues ₹10 crore worth of bonds at a coupon
rate of 8% annually, while the market interest rate is 10%. The bonds are sold at a discount. What is the most likely reason behind this pricing?Solution
When the coupon rate is lower than the prevailing market rate, the bond must be offered at a discount to attract investors.
A certain sum of money becomes Rs. 1922 in 1 year and 2900 in 3 years at certain rate of simple interest. Find the sum of money invested.
Rs.7800 is divided into two parts such that if one part be invested at 3% and the other at 5%, the annual interest from both the investments is Rs. 320....
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Rs. 2,800 increases to Rs. 3,640 in 4 years at a simple interest rate of r% per annum. If Rs. 7,000 is put at 2r% per annum for 1 year, how much interes...
What will be the amount if a sum of Rs. 5000 is placed at compound interest for 3 years while the rate of interest for the first, second and third years...
Rs. 4500 is invested in scheme ‘A’ for a year at simple interest of 40% p.a. The interest received from scheme ‘A’ is reinvested for 2 years in ...
Rohit invested a certain amount at a simple interest rate of r% per annum, which increased to 180% of the original amount over 5 years. If Rs. 2500 is...
An investment of Rs. 9,600 at an annual interest rate of 'R' percent for three years yields a simple interest of Rs. 5,760. Calculate the compound inter...
The difference between compound and simple interest on a sum of money for 2 years at 25% per annum is Rs. 880. The sum is:
