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Josh pays $1,000 for a treasury inflation-protected security that has an annual interest rate of three percent. by the end of the first year that he owns the bond, consumer prices have increased by 10 percent. after this adjustment, how much interest is he paid per year?

Respuesta :

The amount of interest he is paid per year after the adjustment with price increse gives us; $33

What is the interest paid?

Treasury inflated protected security is defined as a type of security issued by the government that is indexed for inflation. .

In this question, we see that Josh is paying $1,000 for a treasury inflation-protected security.

Now, if the value of Josh's bond increases by 10% as a result of increase in consumer price, the new bond price is;

New bond price = 1.10 * 1,000 = $1,100

The interest paid by Josh is 3%. Thus;

New interest paid = 0.03 * 1,100 = $33

Read more about Interest paid at; https://brainly.com/question/16709000

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