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What would you pay for a $205,000 debenture bond that matures in 15 years and pays...

What would you pay for a $205,000 debenture bond that matures in 15 years and pays $10,250 a year in interest if you wanted to earn a yield of: 2%,3%, 4%

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Answer #1
Part-1(A) Computation of Price for Debenture Bond, Rate 2%
PV of Annual interest (10250*12.84926) $131,704.92
PV of Face Value of Bond (205000*0.74301) $152,317.05
Price of Bond $284,021.97
Part-1(B) Computation of Price for Debenture Bond, Rate 3%
PV of Annual interest (10250*11.93794) $122,363.89
PV of Face Value of Bond (205000*0.641862 $131,581.71
Price of Bond $253,945.60
Part-1(c ) Computation of Price for Debenture Bond, Rate 4%
PV of Annual interest (10250*11.11839) $113,963.50
PV of Face Value of Bond (205000*0.55526) $113,828.30
Price of Bond $227,791.80
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