(c) Let P be the purchase price.
P*3.8/100=41.44
Hence P= 41.44*100/3.8 = $ 1090.52
Accrued interest= 33/365*39.44 = $ 3.56
(a)4% yield rate on investment of $986/- gives the figure of $39.44.
Amount of 1st coupon payment = 39.44+2= $ 41.44
( b) Amortisation schedule is attached.
interest | Int amount | Increment | total payments | amortisation | FV=1000 | Mkt Price=986 | ||
1 | 3.94 | 39.44 | 2 | 41.44 | 1.4 | |||
2 | 3.94 | 39.44 | 4 | 43.44 | 1.4 | |||
3 | 3.94 | 39.44 | 6 | 45.44 | 1.4 | |||
4 | 3.94 | 39.44 | 8 | 47.44 | 1.4 | |||
5 | 3.94 | 39.44 | 10 | 49.44 | 14 | |||
6 | 3.94 | 39.44 | 12 | 51.44 | 1.4 | |||
8 | 3.94 | 39.44 | 14 | 53.44 | 1.4 | |||
9 | 3.94 | 39.44 | 16 | 55.44 | 1.4 | |||
10 | 3.94 | 39.44 | 18 | 57.54 | 1.4 | |||
total | 445.06 | 14.00 |
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