Compute the price of a 6.8 percent coupon bond with fifteen years left to maturi

Question

Compute the price of a 6.8 percent coupon bond with fifteen years left to maturity and a market interest rate of 8.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Compute the price of a 6.8 percent coupon bond with fifteen years left to maturity and a market interest rate of 8.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Explanation / Answer

N = 30

FV = 1000

rate = 4%

PMT = 34

use PV function in Excel

price of the bond = 896.25

it is a discount bond

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