A $3,000,000 issue of a 30-year bond, redeemable at par, offers 7.00% coupons payable semi-annually. The bond yields 3.50 % compounded monthly. a. What was the purchase price of the bond, if it was purchased 20 years before maturity? Round to the nearest cent

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter5: The Cost Of Money (interest Rates)
Section: Chapter Questions
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Question 5 of 5
A $3,000,000 issue of a 30-year bond, redeemable at par, offers 7.00% coupons
payable semi-annually. The bond yields 3.50% compounded monthly.
a. What was the purchase price of the bond, if it was purchased 20 years before
maturity?
Round to the nearest cent
b. What was the amount of discount or premium on the bond?
(click to select)
amount is
Transcribed Image Text:Question 5 of 5 A $3,000,000 issue of a 30-year bond, redeemable at par, offers 7.00% coupons payable semi-annually. The bond yields 3.50% compounded monthly. a. What was the purchase price of the bond, if it was purchased 20 years before maturity? Round to the nearest cent b. What was the amount of discount or premium on the bond? (click to select) amount is
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