Answer:
Total Present Value is ($1130.194 + $43.7) = $1173.894
Explanation:
11 percent yield to maturity
TO CALCULATE: Present Value of Interest Payments
PV_A = A × PVIFA (n = 30, i = 11%) Appendix D
where A = 13% of 1000 = 130
from PVIFA table , for n = 30 and i = 11%, PVIFA value is 8.6938
PV_A = $130 × 8.6938 = $1130.194
TO CALCULATE : Present Value of Principal Payment
PV = FV × PVIF (n = 30, i = 11%)
from PVIF table , for n = 30 and i = 11%, PVIF value is 0.0437
PV = $1,000 × 0.0437 = $43.7
From above calculation we have following conclusion
Present Value of Interest Payments is $1130.194
Present Value of Principal Payment is $43.7
therefore Total Present Value is ($1130.194 + $43.7) = $1173.894
