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sweet-ann [11.9K]
3 years ago
12

Compute the price of a 6.3 percent coupon bond with 15 years left to maturity and a market interest rate of 7.0 percent. (Assume

interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Business
1 answer:
IgorC [24]3 years ago
5 0

Answer:

Price of the Bond = $935.63

Explanation:

N = 15 x 2 = 30

I/Y = 7.0%/2 = 3.5%

PMT = 6.3% x 1000 / 2 =  31.5

FV = 1000

Using the Ms Excel Function

Price of the Bond = PV(N, I/Y), PMT, FV)

Price of the Bond = PV(30, 3.5%,  31.5, 1000)

Price of the Bond = $935.6278411

Price of the Bond = $935.63

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