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P6-16 (book/static) Question Help Bond valuation-Annual interest Calculate the value of the bond shown in the following table

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Answer #1

Price of bond = Coupon * PVIFA (n,i)+ face value * PVIF (n,i)

= ( $ 1000*11%) * PVIFA ( 20, 12%) + $ 1000 * PVIF ( 20,12%)

=110 * 7.4694 +1000 * 0.1037

= $ 925.33

Hence the correct answer is $ 925.33

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