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2 April, 17:35

Joaquim Alvez purchases 32 bonds that mature in 2024 at 96.7.

They have a coupon rate of 8.625%.

Find the total cost if commissions are $10 per bond.

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  1. 2 April, 17:46
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    Total par value = 32 bonds x $96.7

    =$3094.4

    total bond value = par vaue + total interest

    total bond value = par value (1+ni)

    n = 2024-2017

    = 7

    i = 8.625%

    total bond value = $4692.64

    total cost = total bond value - commissions

    total cost = $4692.64 - (32 x $10)

    = $4642.64

    Joaquim Alvez will have a total cost of $4642.64.
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