Homework Answers
Information provided:
Par value= future value= $1,000
Time= 7 years
Yield to maturity= 7%
The price of the bond is calculated by computing the present value.
Enter the below in a financial calculator to compute the present value of the bond.
FV= 1,000
N= 7
I/Y= 7
Press the CPT key and PV to compute the present value.
The value obtained is 622.7497.
Therefore, the price of the bond is $622.75.
In case of any query, kindly comment on the solution.
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