LU Liberty U x D My Grad 201540 Fall 20 x k 5 C ezto.mheducation.com 0.100426082

Question

LU Liberty U x D My Grad 201540 Fall 20 x k 5 C ezto.mheducation.com 0.100426082322668 14 1448373731543 Master 8 Homework 5 Question 1 of 26 1.00 points Barry's Steroids Company has $1,000 par value bonds outstanding at 14 percent interest. The bonds will mature in 50 years. f the percent yield to maturity is 11 percent, what percent of the total bond value does the repayment of principal represent? Use Appendix B and AppendixD for an approximate answer but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.) Principal as a percentage of bond price 1,271.25 References eBook & Resources Hints Hint #1 Check my work 2015 McGr Hill Educa instructions l help Ea Save & Exit Submit A 9:14 AM /24/2015

Explanation / Answer

Bond current price = (PVAF@ 11%,50 * Interest ) +(PVF@11%,50 *Face value)

                                 =(9.04165 *140) + (.00542 * 1000)

                                  = 1265.83 + 5.42

                                   = 1271.25

Principal payment = $ 5.45

% of payment of principal amount = 5.45 / 1271.25

                                                              = .00429 or .429%

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