● LOO A $1000 bond bearing interest at 8% payable 2 semi-annually redeemable at par on February 1...

Question

Question

Answer 1

Answer #1

Using financial calculator
Input: FV= 1000

Coupon amount = PMT = 8%*1000/2 = 40

Number of semiannual payments = N = 12

Rate = I/Y = 7/2 = 3.5

Solve for PV as -1048.32

Price of the bond is $1048.32

Answer 2

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