Question

Big State University sold bonds to finance the construction of a new Power Engineering Center. The...

Big State University sold bonds to finance the construction of a new Power Engineering Center. The bonds you are looking at have a face value of $1000, pay 6% semiannually (that’s 6% every six months) and are due in 4.5 years. What is the purchase price if the yield is:

a.4%

b.8%

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Answer #1

The excel calculation and formula used are shown below:


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