Question

Bond prices. Price the bonds from the following table with annual coupon payments: a. Find the price for the bond in the following table: (Round to the nearest cent.) Yield to Maturity Years to Maturity 25 Par Value $5,000.00 Price Coupon Rate 11% - i Data Table (Click on the following loon in order to copy its contents into a spreadsheet.) Coupon Rate Years to Maturity 25 Price 11% Par Value $5.000.00 $5,000.00 $1,000.00 $1,000.00 Yield to Maturity 9% 8% 6% 10% 25 Print Done

Answer 1

a). To find the price, we need to put the following values in the financial calculator:

N = 25;

I/Y = 9;

PMT = 11%*5000 = 550;

FV = 5000;

Press CPT, then PV, which gives us -5,982.26

Hence, Bond Price = $5,982.26

b). To find the price, we need to put the following values in the financial calculator:

N = 25;

I/Y = 8;

PMT = 10%*5000 = 500;

FV = 5000;

Press CPT, then PV, which gives us -6,067.48

Hence, Bond Price = $6,067.48

c). To find the price, we need to put the following values in the financial calculator:

N = 5;

I/Y = 6;

PMT = 7%*5000 = 350;

FV = 5000;

Press CPT, then PV, which gives us -5,210.62

Hence, Bond Price = $5,210.62

d). To find the price, we need to put the following values in the financial calculator:

N = 25;

I/Y = 5;

PMT = 8%*5000 = 400;

FV = 5000;

Press CPT, then PV, which gives us -7,114.09

Hence, Bond Price = $7,114.09