Target\'s bonds mature in 7 years, have a par value of $1,000, and make an annua
ID: 2705870 • Letter: T
Question
Target's bonds mature in 7 years, have a par value of $1,000, and make an annual coupon payment of $70. The market interest rate for the bonds is 8.5%. What is the bond's price? Answer a. $923.22 b. $946.30 c. $969.96 d. $994.21 e. $1019.06 Target's bonds mature in 7 years, have a par value of $1,000, and make an annual coupon payment of $70. The market interest rate for the bonds is 8.5%. What is the bond's price? $923.22 $946.30 $969.96 $994.21 $1019.06 a. $923.22 b. $946.30 c. $969.96 d. $994.21 e. $1019.06Explanation / Answer
price = 70 * PVIFA(8.5%,7) + 1000 *PVIF(8.5%,7)
= 70 * 5.1185 + 1000 *0.5649
=923.22
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