Jan 1, 2020, purchased for $409,686 a 7.5% bond that matures in 5years, when the market interest rate was 7.1%. Interest is paid semiannually beginning June 30,2017. Plan to hold this investment till maturity. What is the Face Value of this bond? Please show the complete calculations with all the steps. I have the answer with me but I don't know how the answer was arrived at. THANKS

Jan 1, 2020, purchased for $409,686 a 7.5% bond that matures in 5years, when the market interest rate was 7.1%. Interest is paid semiannually beginning June 30,2017. Plan to hold this investment till maturity. What is the Face Value of this bond? Please show the complete calculations with all the steps. I have the answer with me but I don't know how the answer was arrived at. THANKS

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 3P

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