Question

What is the price of the following semi-annual bond?

                      face value:              $1,000

                      maturity:                  10 years

                      coupon rate:           8%

                      discount rate:         9%

Answer 1

Face Value				fv			=	$    1,000
Maturity				nper	=	10*2	=	20
(Number of periods to mature)
Coupon amount				pmt	=	1000*8%*6/12	=	$          40
Discount rate				rate	=	9%*1/2	=	4.5%
Price of Bond is the present value (pv) of cash flows from bond.
Price of Bond		=	=-pv(rate,nper,pmt,fv)
		=	$ 934.96