Calculate the price of a 6.2 percent coupon bond with 15 years left to maturity

Question

Calculate the price of a 6.2 percent coupon bond with 15 years left to maturity and a market interest rate of 9.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Calculate the price of a 6.2 percent coupon bond with 15 years left to maturity and a market interest rate of 9.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Explanation / Answer

Hi,

Nper = 15*2 = 30 (indicates the period)

PV = ? (indicates the price)

FV = 1000 (indicates the face value)

Rate = 9%/2 (indicates semi-annual YTM)

PMT = 1000*6.2%*1/2 = 31 (indicates the amount of interest payment)

Price = PV(Rate,Nper,PMT,FV) = PV(9%/2,30,31,1000) = $771.96

Answer is $771.96

Thanks.

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