Please note this is one problem with two Individual questions. Please help solve

Question

Please note this is one problem with two Individual questions. Please help solve using excel and show the calculations how to input in excel as I am having hard time calculating it . Much thanks Question 7 1. "A coupon bond that pays interest quarterly has a par value of $1000, matures in 4 years, and has a yield A coupon bond that pays interest quarterly has a par value of $1000, matures in 4 years, and has a vield to maturity of 5%. If the coupon rate is 7%, the value of the bond today will be " 2. "A coupon bond that pays interest annually has a par value of $1000, matures in 4 years, and has a yield to maturity of 6%. If the coupon rate is 6.5%, the value of the bond today will be ."

Explanation / Answer

Answer 1

Interest on bond is given quaterly so

N => 4 * 4 => 16years

I => 5% => 5 / 4 => 1.25%

PTM => 1000 * 7%=> 70 / 4 => $17.5

Value of a bond is => 17.5 * PVIAF(1.25%,16) + 1000 * PVIF(1.25%,16)

=> (17.5 * 14.42) + (1000 * 0.819)

Value of a bond is => $1071.35

Answer 2

N => 4

I => 6%

PTM => 1000 * 6.5% => 65

Value of a bond is => 65 * PVIAF(6%,4) + 1000 * PVIF(6%,4)

=> 65 * 3.465 + 1000 * 0.792

Value of a bond is => $1017.23

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