Annual coupon = 0.14 * 15,000 = 2,100
Present value = Annuity * [1 - 1 / (1+r)n] / r + Fv / (1 + r)n
Present value = 2100 * [1 - 1 / (1 + 0.12)16] / 0.12 + 15000 / (1 + 0.12)16
Present value = 2100 * [1 - 0.163122] / 0.12 + 2,446.824928
Present value = 2100 * 6.973983 + 2,446.824928
Present value = $17,092
Find the present value of a bond with a maturity date 16 years from now, 14%...
Find the present value of a bond with a maturity date 16 years from now, 14% yearly coupons, and a face value of $15,000, given an effective annual discount rate of 12%. Select one: 0 a. $17,970 b. $17,324 c. $18,320 d. $17,092 e. $16,500 O o
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