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| rev | Admin | (Created page with "Let <math>Y</math> indicate the nominal value of the two-year bond, then: <math>9465=\frac{0.05 Y}{1.08}+\frac{1.05 Y}{1.08^2}</math>, so <math>Y=10,000</math>. Thus, the amount of liability at the end of the second year is 10,500 . Hence, the liability at the end of the first year is: <math display = "block"> \frac{10,500}{2}=5250 </math> So, the amount invested in the one-year bond is: <math display = "block"> \frac{5250-10,000(0.05)}{1.06}=4481 \text {. } </math> {...") | Nov 20'23 at 21:56 | +498 |