otter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. The par value of the bond is $

Question

3 years ago

11

1,000. If the going annual interest rate is 8.8%, what is the value of the bond

1 answer:

uysha [10] · Answer 1 · 2022-10-20T12:39:00+03:00

Answer:

the present value is $818.71

Explanation:

The computation of the value of the bond is shown below:

Given that

RATE = 8.8%

NPER = 10

PMT = $1,000 × 6% = $60

FV = $1,000

The formula is given below:

= -PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $818.71

Kindly find the attachment regarding the same