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One year ago, XYZ Co. issued 15-year bonds at par. The bonds have a coupon rate...

One year ago, XYZ Co. issued 15-year bonds at par. The bonds have a coupon rate of 4.81 percent, paid semiannually, and a face value of $1,000. Today, the market yield on these bonds is 4.27 percent. What is the percentage change in the bond price over the past year?

Answer to two decimals.  

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Answer #1
Computation Of Bond Price
a Semi-annual Interest Amount $              24.05
($1000*4.81%/2)
b PV Annuity Factor for (28 Years,2.135%) 20.913721
c Present Value Of Annual Interest (a*b) $           502.97
d Redemption Value $        1,000.00
e PV Factor Of (28 Years,2.135%) 0.55349
g Present Value Of Redemption Amount (d*e) $           553.49
f Price Of The Bond (c+g) $        1,056.47
Percentage change in bond price = ($1056.47-1000)/1000
=5.65%
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