Question

A government issues $6000000 of serial bonds paying interest at j12 = 9%, of which $1000000...

A government issues $6000000 of serial bonds paying interest at j12 = 9%, of which $1000000 is redeemed in 15 years, $1500000 is redeemed in 20 years and $3500000 is redeemed in 30 years. Determine the purchase price on the day that the bonds were issued, in order for investors to receive a yield of j12 = 7%.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Computation of Issue price Semi- Date Annuals 1-15 Interest Cash flow PV factor at 7% Disc. cash flow $ $ 4,918,271 $ 15th 16

Add a comment
Know the answer?
Add Answer to:
A government issues $6000000 of serial bonds paying interest at j12 = 9%, of which $1000000...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT