Question

X 5 Calculating a bond price - Excel ? X = INSERT - Sign In FILE HOME PAGE LAYOUT FORMULAS DATA REVIEW VIEW Calibri 11 AA - A Paste B IU Alignment Number Cells Editing 5.12 oints Conditional Format as Cell Formatting Table Styles Styles Clipboard Font Skipped A1 AB E F G H eBook Print Yan Yan Corp. has a $2,000 par value bond outstanding with a coupon rate of 4.9 percent paid semiannually and 13 years to maturity. The yield to maturity of the bond is 3.8 percent. What is the dollar price of the bond? References 1/1/2000 1/1/2013 4.90% Settlement date Maturity date Coupon rate Coupons per year Redemption value (% of par) Yield to maturity Par value 100 3.80% 2,000 Complete the following analysis. Do not hard code values in your calculations. Leave the "Basis" input blank in the function. You must use the built-in Excel function to answer this question. Dollar price
PLEASE WRITE THE ANSWER AS A EXCEL FORMULA

Answer 1

The bond price can be found using the excel function PV

PV(rate, nper, pmt, [fv], [type])

Cell D17 =PV(D11/2, (D7 - D6)/365*2, D12*D8/2, D12)

rate = 3.8%/2

rate = 0.019

nper = 13 * 2

nper = 26 semi-annual coupon payments

pmt = 2000 * 0.049/2

pmt = 49

FV = 2000

=PV(0.019,26, 49,2000)

-$2,224.043854

(Ignore the negative sign)

Bond price = $2,224.043854

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