Homework Answers
Face Value of Bonds = $48,000
Annual Coupon Rate = 6.00%
Semiannual Coupon Rate = 3.00%
Semiannual Coupon = 3.00% * $48,000
Semiannual Coupon = $1,440
Annual Interest Rate = 6.00%
Semiannual Interest Rate = 3.00%
Time to Maturity = 20 years
Semiannual Period = 40
Issue Price = $1,440 * PVA of $1 (3.00%, 40) + $48,000 * PV of
$1 (3.00%, 40)
Issue Price = $1,440 * 23.11477 + $48,000 * 0.30656
Issue Price = $48,000
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