Problem 10-4 A bond with 20 years until maturity has a coupon rate of 7.4 percen
ID: 2779466 • Letter: P
Question
Problem 10-4
A bond with 20 years until maturity has a coupon rate of 7.4 percent and a yield to maturity of 6.1 percent. What is the price of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
A bond with 20 years until maturity has a coupon rate of 7.4 percent and a yield to maturity of 6.1 percent. What is the price of the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Explanation / Answer
Statement showing Cash flows Particulars Time PVF @6.1% Amount PV Cash flows (Intt) 1.00 0.9425 74.00 69.75 Cash flows (Intt) 2.00 0.8883 74.00 65.74 Cash flows (Intt) 3.00 0.8372 74.00 61.96 Cash flows (Intt) 4.00 0.7891 74.00 58.39 Cash flows (Intt) 5.00 0.7437 74.00 55.04 Cash flows (Intt) 6.00 0.7010 74.00 51.87 Cash flows (Intt) 7.00 0.6607 74.00 48.89 Cash flows (Intt) 8.00 0.6227 74.00 46.08 Cash flows (Intt) 9.00 0.5869 74.00 43.43 Cash flows (Intt) 10.00 0.5532 74.00 40.93 Cash flows (Intt) 11.00 0.5214 74.00 38.58 Cash flows (Intt) 12.00 0.4914 74.00 36.36 Cash flows (Intt) 13.00 0.4631 74.00 34.27 Cash flows (Intt) 14.00 0.4365 74.00 32.30 Cash flows (Intt) 15.00 0.4114 74.00 30.44 Cash flows (Intt) 16.00 0.3878 74.00 28.69 Cash flows (Intt) 17.00 0.3655 74.00 27.04 Cash flows (Intt) 18.00 0.3444 74.00 25.49 Cash flows (Intt) 19.00 0.3246 74.00 24.02 Cash flows (Intt) 20.00 0.3060 74.00 22.64 Cash flows (Maturity price) 20.00 0.3060 1,000.00 305.98 Bond Price 1,147.91
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