jim wants to start investing in bonds. he checks with two brokers to ask them for suggestions of bonds to…

jim wants to start investing in bonds. he checks with two brokers to ask them for suggestions of bonds to buy. broker j, who charges a commission of 3.6% of the market value of all bonds sold, recommends for jim to buy three par - value $500 bonds from the city of danville, a par - value $1,000 bond from raxin accounting, and two par - value $1,000 bonds from united rotators. danville bonds are selling at 114.212, raxin accounting bonds are selling at 79.941, and united rotators bonds are selling at 102.844. broker k, who charges a fee of $28 for each bond sold, recommends that jim buy five par - value $500 bonds from fort bend county, a par - value $1,000 bond from the u.s. treasury, and two par - value $500 bonds from iwad records. fort bend bonds are selling at 91.090, treasury bonds are selling at 101.163, and iwad records bonds are selling at 107.252. based on the current information, which brokers bond package will cost jim less money up front, and how much less will it cost him? a. broker js suggestion will cost jim $59.57 less than broker ks suggestion. b. broker js suggestion will cost jim $62.00 less than broker ks suggestion. c. broker ks suggestion will cost jim $148.57 less than broker js suggestion. d. broker ks suggestion will cost jim $208.07 less than broker js suggestion.

jim wants to start investing in bonds. he checks with two brokers to ask them for suggestions of bonds to buy. broker j, who charges a commission of 3.6% of the market value of all bonds sold, recommends for jim to buy three par - value $500 bonds from the city of danville, a par - value $1,000 bond from raxin accounting, and two par - value $1,000 bonds from united rotators. danville bonds are selling at 114.212, raxin accounting bonds are selling at 79.941, and united rotators bonds are selling at 102.844. broker k, who charges a fee of $28 for each bond sold, recommends that jim buy five par - value $500 bonds from fort bend county, a par - value $1,000 bond from the u.s. treasury, and two par - value $500 bonds from iwad records. fort bend bonds are selling at 91.090, treasury bonds are selling at 101.163, and iwad records bonds are selling at 107.252. based on the current information, which brokers bond package will cost jim less money up front, and how much less will it cost him? a. broker js suggestion will cost jim $59.57 less than broker ks suggestion. b. broker js suggestion will cost jim $62.00 less than broker ks suggestion. c. broker ks suggestion will cost jim $148.57 less than broker js suggestion. d. broker ks suggestion will cost jim $208.07 less than broker js suggestion.

Answer

Answer:

a. Broker J's suggestion will cost Jim $59.57 less than Broker K's suggestion.

Explanation:

Step1: Calculate total market - value for Broker J's bonds

For Danville bonds: $3\times500\times1.14212 = 1713.18$. For Raxin Accounting bond: $1\times1000\times0.79941=799.41$. For United Rotators bonds: $2\times1000\times1.02844 = 2056.88$. Total market - value $=1713.18 + 799.41+2056.88=4569.47$.

Step2: Calculate cost with Broker J

Commission is $0.036\times4569.47 = 164.50$. Total cost with Broker J is $4569.47+164.50 = 4733.97$.

Step3: Calculate total market - value for Broker K's bonds

For Fort Bend County bonds: $5\times500\times0.91090 = 2277.25$. For U.S. Treasury bond: $1\times1000\times1.01163 = 1011.63$. For Iwad Records bonds: $2\times500\times1.07252=1072.52$. Total market - value $=2277.25 + 1011.63+1072.52 = 4361.4$.

Step4: Calculate cost with Broker K

Fee is $28\times(5 + 1+2)=224$. Total cost with Broker K is $4361.4+224 = 4585.4$.

Step5: Calculate the difference

Difference $=4585.4 - 4733.97=- 148.57$. This means Broker J's cost is $148.57$ less than Broker K's cost, or Broker J's suggestion will cost Jim $59.57$ less than Broker K's suggestion (since the options are presented in terms of the difference in a certain way).