Please provide the solution, Thank you.
(Note: It is assumed that Yield to Maturity is compounded semiannualy. Therefore, discounting rate = 11/2 = 5.5%
Period | Cash Flow |
Discounting Factor [1/(1.055^year)] |
PV of Cash Flows (cash flows*discounting factor) |
1 | 65 | 0.947867299 | 61.61137441 |
2 | 65 | 0.898452416 | 58.39940702 |
3 | 65 | 0.851613664 | 55.35488817 |
4 | 65 | 0.807216743 | 52.46908831 |
5 | 65 | 0.765134354 | 49.733733 |
6 | 65 | 0.725245833 | 47.14097915 |
7 | 65 | 0.687436809 | 44.68339256 |
8 | 65 | 0.651598871 | 42.35392659 |
9 | 65 | 0.617629261 | 40.14590198 |
10 | 65 | 0.585430579 | 38.05298766 |
11 | 65 | 0.554910502 | 36.06918262 |
12 | 65 | 0.525981518 | 34.18879869 |
13 | 65 | 0.498560681 | 32.40644426 |
14 | 65 | 0.472569366 | 30.71700877 |
15 | 65 | 0.447933048 | 29.11564813 |
16 | 65 | 0.424581088 | 27.59777074 |
17 | 65 | 0.402446529 | 26.15902439 |
18 | 65 | 0.381465904 | 24.79528379 |
19 | 65 | 0.361579056 | 23.50263866 |
20 | 65 | 0.342728963 | 22.27738262 |
21 | 65 | 0.324861577 | 21.11600248 |
22 | 65 | 0.307925665 | 20.01516823 |
23 | 65 | 0.291872668 | 18.97172344 |
24 | 65 | 0.276656558 | 17.98267624 |
25 | 65 | 0.262233704 | 17.04519075 |
26 | 65 | 0.248562753 | 16.15657891 |
27 | 65 | 0.235604505 | 15.31429281 |
28 | 65 | 0.223321805 | 14.51591735 |
29 | 65 | 0.211679436 | 13.75916337 |
30 | 65 | 0.200644016 | 13.04186101 |
31 | 65 | 0.190183901 | 12.36195357 |
32 | 65 | 0.180269101 | 11.71749153 |
33 | 65 | 0.170871185 | 11.10662705 |
34 | 65 | 0.161963209 | 10.52760857 |
35 | 65 | 0.153519629 | 9.978775899 |
36 | 65 | 0.145516236 | 9.458555355 |
36 | 1000 | 0.145516236 | 145.5162362 |
Price of the Bond = Sum of PVs |
1155.360684 |
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