Use Excel or Google Open Source Spreadsheet for this problem: You own a 10 year bond that has a face value of $9,000 and pays 6% interest each year once a year at the end of the year. Eight years after buying it, the interest rate decreases to 4%. You do not want to wait 2 more years to get your principle of $9,000 back because you really need the money now, so you decide to sell it on the open market. 1. How much can you sell it for? 2. Is it a capital loss or a capital gain? How much is the capital gain or loss?

Use Excel or Google Open Source Spreadsheet for this problem: You own a 10 year bond that has a face value of $9,000 and pays 6% interest each year once a year at the end of the year. Eight years after buying it, the interest rate decreases to 4%. You do not want to wait 2 more years to get your principle of $9,000 back because you really need the money now, so you decide to sell it on the open market. 1. How much can you sell it for? 2. Is it a capital loss or a capital gain? How much is the capital gain or loss?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 6P

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