Homework Answers
Bond quarterly interest = 2000 x (11.5%/4) = 57.5
Number of quarters = 5 x 4 = 20
Quarterly interest rate per quarter = 14%/4 = 3.5%
Bond's Selling price after 5 years ($) = 57.5 x F/A(3.5%, 20) + 2100 x F/P(3.5%, 20)
= 57.5 x 28.2797 + 2100 x 1.9898
= 1626.08 + 4178.56
= 5804.64
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