1. Find the price of the following bonds issued on November 30, 2017 on thet day
ID: 2789850 • Letter: 1
Question
1. Find the price of the following bonds issued on November 30, 2017 on thet day that they are issued. Please show your work. [Hint: State what F, r, C, n, m, and j are.] (a) 7.5% bond with a face value of $35,000, maturing on November 30, 2023 and yielding (b) 6.3% bond with monthly coupons and a par value of $25,000, maturing on January 31, (c) 3.65% bond with annual coupons and a par value of $40,000, maturing on November 30, (d) 6.8% bond with quarterly coupons and a face value of $22,000 and a redemption value 8.25%. 2029 and yielding 7.2%. 2021 and yielding 6.5%. of $23,500, maturing on May, 2022 and yielding 5.5%.Explanation / Answer
Using BAII Plus calculator to find out the prices of following bonds:
a. FV 35000, 7.5% OF 35000= 2625 PMT, 6 N, 8.25 I/Y CPT PV
PVor Price of Bond= $33795.64
b. FV 25000, (6.3% OF 25000)/12= 131.25 PMT, (11*12)+2= 134 N, 7.2/12=0.60 I/Y CPT PV
PVor Price of Bond= $23276
c. FV 40000, (3.65% OF 40000)= 1460 PMT, 4 N, 6.50 I/Y CPT PV
PVor Price of Bond= $36094.59
d.FV 23500, (6.8% OF 22000)/4= 374 PMT, (4*4)+2= 18N, 5.50/4=1.375 I/Y CPT PV
PVor Price of Bond= $24306.35
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.