Question

how to solve What is the value of a $1,000 par value 6% coupon bond with 7 years remaining to maturity assuming annual coupon payments and a market rate of 9% on similar risk bonds?

Answer 1

Answer:

$849.01

Explanation:

For this question, we use the Present value formula that is shown on the attachment. Kindly find it below:

Data provided in the question

Future value = $1,000

Rate of interest = 9%

NPER = 7 years

PMT = $1,000 × 6% = $60

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the present value is $849.01