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To find the value of the bond, we need to calculate the present value of its future cash flows, which include annual coupon payments and the face value at maturity. The annual coupon payment is 6% of the face value, which is $1,200. Using a discount rate of 8%, the present value of the coupon payments and the face value can be calculated as follows:
[ PV = \frac{1,200}{(1 + 0.08)^1} + \frac{1,200}{(1 + 0.08)^2} + \frac{1,200}{(1 + 0.08)^3} + \frac{1,200}{(1 + 0.08)^4} + \frac{1,200 + 20,000}{(1 + 0.08)^5} ]
Calculating this gives a bond value of approximately $17,490.66.
What else can I help you with?
A ten-year bond pays 11 percent interest on a 1000 face value annually If it currently sells for 1195 what is its approximate yield to maturity?
A ten-year bond pays 11 % interest on a $1000 face value annually. If it currently sells for $1,195, what is its approximate yield to maturity
Anant purchases a bond whose face value is Rs 1000 maturity period 5 years coupled with a nominal interest rate of 8 persent The required rate of return is 10 percent what price hould he pay?
924.28
The real risk-free rate of interest is 4 percent Inflation is expected to be 2 percent this year and 4 percent during the next 2 years Assume that the maturity risk premium is zero What is the yield?
The answers are 7%, 7.33%.
A bond pays semiannual interest of 50 They mature in 15 years and have a par value of 1000 The market rate of interest is 8 percent The market value of the bonds is?
To calculate the market value of the bonds, we can use the present value of future cash flows formula. The bond pays $50 semiannually, resulting in 30 payments (15 years x 2). The market interest rate is 8% annually, or 4% semiannually. The present value of the annuity (interest payments) and the present value of the par value at maturity can be calculated and summed to find the market value of the bond, which is approximately $1,165.51.
A one-year US Treasury security has a nominal interest rate of 2.25 percent If the expected real rate of interest is 1.5 percent what is the expected annual inflation rate?
Ok, this is my own question. This is what I came up with. can anyone confirm or correct?Maturity r = RR + IP1-YEAR 2.25% = 1.5% + X2.25% - 1.5% = .75%
A ten-year bond pays 11 percent interest on a 1000 face value annually If it currently sells for 1195 what is its approximate yield to maturity?
A ten-year bond pays 11 % interest on a $1000 face value annually. If it currently sells for $1,195, what is its approximate yield to maturity
A firm has an issue of 1000 par value bonds with a 12 percent stated interest rate outstanding The issue pays interest annually and has 10 years remaining to its maturity date If bonds of similar r?
1268.20
5 percent interest compounded annually means percent paid every?
year
What does 4.9 percent p. a. interest mean on a credit card?
It means the percent of interest paid annually (p.a. means per annum).
How much interest will be earned on 1250 at a 5 percent interest annually?
5% ($72.50) per year.
What is the simple interest paid annually for 5 years on a 700 loan at 11 percent per year?
The interest paid annually is 700*5/100 = 35
How do you converts interest rate from compounding quarterly to compound annually?
Interest of r% per quarter is equivalent to {(1+r/100)4 - 1} percent annually.
Suppose Betty takes out a loan for 300 at an annually compounded interest rate of 6 percent to be repaid after 5 years How much will be required to pay off the loan?
390.45
How much interest would be paid on 11000.00 at 6 percent per month?
11000*6/100 = 6606% per month is an outlandish interest rate - equivalent to more than 100 percent annually.11000*6/100 = 6606% per month is an outlandish interest rate - equivalent to more than 100 percent annually.11000*6/100 = 6606% per month is an outlandish interest rate - equivalent to more than 100 percent annually.11000*6/100 = 6606% per month is an outlandish interest rate - equivalent to more than 100 percent annually.
What is the monthly interest rate of 18 percent annually?
With simple interest, it is 1.5% per month. If compounded, it is 1.389% approx.
How much interest is earned for the investment 20 000 for 2 years at 6 percent compounded annually?
Interest = 2472
If you deposit 10000 in a bank account that pays 8 percent interest annually how much would be deposited in your account after 5 years?
Principle = 10,000/-Interest Rate = 0.08Tenor = 5 YEARSValue of deposit on maturity = Principle X (1+Interest Rate) ^ Tenor= 10,000 X (1+0.08)^5 = Rs 14,693.28
