6.2.3 A 6% $1000 par-value bond maturing in eight years and having semiannual co

Question

6.2.3 A 6% $1000 par-value bond maturing in eight years and having semiannual coupon is to be replaced by a 5.5% $1000 par bond, also with semiannual coupons. Both bonds are bought to yield 5% nominal interest convertible semiannually. In how many years should the new bond mature? (Both bonds have the same price as well as the same yield.) Answer to the nearest half-year. Asked this twice and got the wrong solutions by the same person both times. The correct answer is 21.5 years, and I would like a step-by-step solution to get that answer, PLEASE.

Explanation / Answer

i dont knw how to solve this, but this PDf has a lot to simmilar type of problems http://userpage.fu-berlin.de/~ballou/cofi/mctest/test04.pdf Hope it helps u to clear your concept use Ctrl+F to find the problems !!

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