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Q: Assuming that the bond was issued several years. Is it true the following equation can be used to find the value of a bond with N years to maturity that pays interest once a year?
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Related questions

What is a yield to maturity?

A yield to maturity is the internal rate of return on a bond held to maturity, assuming scheduled payment of principal and interest.

The equation for computing interest on an interest bearing note is as follows interest equals maturity value times interest rate times time?


Which of the following bonds has the greatest interest rate price risk?

There is no bond specified. Probably the one with the greatest maturity.

Maturity value of an interest-bearing note payable is the?

Face value plus interest.

Does bond pay interest on maturity?

Yes. At maturity you get the final coupon payment in addition to the return of principal.

What is a runoff cash flow?

Runoff cash flow refers to assets that are prepaid before maturity or liabilities that are withdrawn before maturity. In either case, the result is higher interest rate risk. This is because the interest rate risk is measured assuming no prepayment of assets or withdrawal of liabilities occur before maturity. The risk of runoff cash flows is one of the important weaknesses of the repricing model, which is commonly used model in smaller financial institutions.

What is maturity value?

The new value to a loan or investment after interest.

What is repaid to the investor on a bond's maturity date?

The principle and interest.

How can you estimate interest rate risk?

Interest rate risk is measured by time to maturity and coupon rate

What is non-zero coupon bonds?

if a bond has finite maturity or limited maturity then we must consider not only the interest rate stream but also the maturity value (face value).regardsSajida Gul

Is The maturity value of a loan is the total amount of principal and interest that must be repaid?

Yes it is

Where you pay off debt at face value plus interest is called?

maturity value