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Bill Mitsel k has purchased a bond that was issued by Acme Chemical. This bond as a ace value of$1,000 and a sad dend of 8 per yea「compounded semi-annually. Bill bought the bond four years ago at face value and there are seven years remaining until the bond matures. Bill wishes to sell it now for a price that will result in Bill earning an annual yield of 10% compounded semi-annually. What price does Bll need to sa the bond orto eam is esired reum The selling price of the bond should be s (Round to the nearest dollar.)

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The face value of the bond is $1,000 and a dividend of 8% is given which is compounded semiannually. Bill bought the bond four years ago and there are 7 years remaining until it matures. However, Bill desires to sell at a price that has annual yield of 10% compounded semi annually The selling price of the bond is calculated as follows: Function Arguments FV Rate 10%/2 Nper 42 Pmt 1000*896/2 005 40 Pv 1000 1000 Type number - 1095.491089 Returns the future value of an investment based on periodic, constant payments and a constant interest rate Type is a value representing the timing of payment payment at the beginning of the period 1 payment at the end of the period 0 or omitted Formula result$1,095.49 OK Cancel The selling price of the bond should be S1095.49.

answered by: ANURANJAN SARSAM
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