Question

What is the price of a 5​-year, 8.2% coupon​ rate, $1,000 face value bond that pays...

What is the price of a

5​-year,

8.2%

coupon​ rate,

$1,000

face value bond that pays interest annually if the yield to maturity on similar bonds is

7.2%​?

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Homework Answers

Answer #1

Face Value of bond = $1000

Annual Coupon Bond = $1000*8.2%

= $82

No of years to maturity(n) = 5 years

YTM = 7.2%

Calculating the Price of Bond:-

Price = $334.4206 + $706.359

Price = $1040.78

So, the price of 5-year bond is $1040.78

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