Barry’s Steroids Company has $1,000 par value bonds outstanding at 16 percent

Question

Barry’s Steroids Company has $1,000 par value bonds outstanding at 16 percent interest. The bonds will mature in 40 years.

If the percent yield to maturity is 12 percent, what percent of the total bond value does the repayment of principal represent? Use Appendix B and Appendix D. (Round intermediate calculations to 2 decimal places, "PV Factor" and final answer to 3 decimal places. Omit the "%" sign in your response.)

Principal repayment? WHAT PERCENT?

Barry’s Steroids Company has $1,000 par value bonds outstanding at 16 percent interest. The bonds will mature in 40 years.

Explanation / Answer

Bond Value = 160 PVIFA(12%,40) + 1000 PVIF(12%,40) = $1329.75

Principal payment = 10.75

Principal Repayment in % form = 10.75/1329.75*100= 0.808%

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