Answer A
Maturity Value of Bond | 1000 |
Bond Tenure (Years) | 10 |
PVIF @ 5% for 10 Years | 0.613913 |
PV of Maturity Value (A) | 613.9133 |
Annual Interest Payments | 110 |
PVIFA @ 5% for 10 Years | 7.72 |
PV of Interest Payments (B) | 849.39 |
Price of The Bond as the time of Issue | 1,463.30 |
Answer B
Maturity Value of Bond | 1000 |
Bond Tenure (Years) | 10 |
PVIF @ 5% for 9 Years | 0.644609 |
PV of Maturity Value (A) | 644.6089 |
Annual Interest Payments | 110 |
PVIFA @
5% for 10 Years (Beginning of the period) |
8.11 |
PV of Interest Payments (B) | 891.86 |
Price of The Bond as the time of Issue | 1,536.47 |
Answer C
Maturity Value of Bond | 1000 |
Bond Tenure (Years) | 10 |
PVIF @ 5% for 9 Years | 0.644609 |
PV of Maturity Value (A) | 644.6089 |
Annual Interest Payments | 110 |
PVIFA @
5% for 9 Years (End of the period) |
7.11 |
PV of Interest Payments (B) | 781.86 |
Price of The Bond as the time of Issue | 1,426.47 |
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