. A bond has a face value of $1000 and a market price of $1064. If the interest payment on the bond is $100 annually and the bond matures in 10 years, the required rate on the bond is (the nearest rate),
a) 9.00%
b) 10.00%
c) 7.30%
d) 11.50%
Calculator | |
Inputs: | |
PV | (1,064) |
PMT | 100 |
FV | 1,000 |
N | 10 |
Output: | |
I/Y = IRR= | 9.00% |
Answer is 9%
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