5. A 30 year 10000 bond that pays 3% annual coupons matures at par. It is...

Question

Question

Answer 1

Answer #1

Amount of accumulation for depreciation =Book value start of year 8 (23 years remaining) * yield rate - coupon

Book value at start of year 8= 7954.82

Yield rate = 5%= 0.05

Coupon = 3%

= 10, 000 * 3%

= 300

Amount of accumulation = (7954.82*.05) -300= 97.74

Answer 2

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