Question

What is the price of a 12 year bond paying semiannual interest at a rate of 9.5% with a yield to maturity of 9.75%? Assume par is $1,000.

Step 1

Par Value of Bond = $1,000

Interest Rate = 9.5%

Type of Interest = Semi-annual

Calculation of semi-annual interest payment:

Step 2

Par Value of Bond (fv) = $1,000

Semi-annual Interest (pmt) = $47.5

Time Period = 12 years

Number of Payments per year = 2

Time to Maturity (nper) = 24

Yield to Maturity (rate) = 9.75%

&nbs...

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