Consider an annual coupon bond with a face value of $100100, 44 years to maturity, and...

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Consider an annual coupon bond with a face value of $100100, 44 years to maturity, and...

Consider an annual coupon bond with a face value of $100100, 44 years to maturity, and a price of $8585. The coupon rate on the bond is 66%. If you can reinvest coupons at a rate of 22% per annum, then how much money do you have if you hold the bond to maturity?

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Answer 1

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Future value Year Cash flows FVIF@22% 0 $ - 2.2153 $ 1 $ 6 1.8158 $ 2 $ 6 1.4884 $ I 3 $ 6 1.2200 $ 4 $ 106 1.0000 $ 10.90 8.

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