ugt) be if you make monthly installments over the next 30 years (round to the ie

Question

ugt) be if you make monthly installments over the next 30 years (round to the iest Pate for 30 years. What will your mon dollar) a) $2,051 b) $2,061 c) $2,071 d) $2,081 e) $2,091 17. Five years ago Constellation, Inc, sold an issue of 20-year $1000 par bonds to finance The bonds pay 7.0% interey semi-annually. Today's required rate of return for similarly rated bonds is 67%. How much should these bonds self for today? (Round off to the nearest s1.) Inc., sold an issue of 20-year $1000 par bonds to finance a new distribution terminal. a) $650 Page 6 Copyright Cengage Leaming. Powered by Cogner

Explanation / Answer

Years left =15
n=15*2=30
FV=1000
Coupon = 35
Rate 6.7%
Compute PV using excel
Excel formula: =PV(0.0335,30,35,1000)

Hence the bond shall sell for $1,028

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