World Travel has 7 percent, semiannual, coupon bonds outstanding with a current market price at $1,023.46,...

Question

Question

Answer 1

Answer #1

Face value (FV)	$ 1,000
Coupon rate	7.00%
Number of compounding periods per year	2
Interest per period (PMT)	$ 35.00
Number of years to maturity	12.53	(Trial and error)
Number of compounding periods till maturity (NPER)	25.06
Market rate of return/Required rate of return	6.72%
Market rate of return/Required rate of return per period (RATE)	3.36%
Bond price	PV(RATE,NPER,PMT,FV)

Bond price	$ 1,023.46
	PV(3.47%,14,32.5,1000)*-1

Answer 2

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