A 8 year $18000 par-valued bond pays monthly coupons. If the yield rate is y(12) =...
A 8 year $18000 par-valued bond pays monthly coupons. If the yield rate is y(12) = 10% and the purchase price is $11475.75, what is the coupon rate c(12)?
Homework Answers
Answer is 3.40%
we need to Find PMT using PMT funtion
| RATE 10%/12 | 0.83% |
| NPER 8*12 | 96 |
| PV | -11475.8 |
| FV | 18000 |
| PMT(.83%,96,-11475.8,18000) | Rs. 51.00 |
| So Coupon Payment rate =(51*12)/18000 | 3.40% |
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