Ask Question
1 July, 18:38

What is the price of a $1,000 par value bond with an 8% coupon rate paid annually, and 6 years to maturity if the bond is currently sold at the yield-to-maturity of 7.32%? Round to the nearest cent. Do not a dollar sign in your answer.

+4
Answers (1)
  1. 1 July, 21:16
    0
    The price of the bond is $1032.09

    Explanation:

    Annual coupon = $1000*8%

    = $80

    then the price of the bond is given by;

    price of bond = Annual coupon*Present value of annuity factor

    = $80*4.719814309 + $1000*0.654509592

    = $1032.09

    Therefore, The price of the bond is $1032.09
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “What is the price of a $1,000 par value bond with an 8% coupon rate paid annually, and 6 years to maturity if the bond is currently sold at ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers