Which of the following is NOT one of the three big categories for periodic evaluations:
1 answer:
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Answer: The coupon rate is 13%
Explanation:
We would first calculate the Coupon Payment and then later using the coupon payment we would compute the Coupon rate.
PV = + A [
]
Where,
FV = $1,000
PV = $1,291.31
r = 8%
N = 8 Years
A = Coupon Payment
1291.31 = + A
Solve for A
A = 130.69
The coupon payment is $130
Coupon rate = (Coupon payment / Face value) x 100
= x 100
= 13 %