Question

.   A bond has a face value of $1000 and a market price of $1064. If...

.   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%     

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Answer #1
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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