Question

in 2015 you bought $1,000 face value bond. 20 year maturity. 7% coupon. in 2020 you sell. bond has 9% coupon. what is value in 2020? formula please also

Answer #1

The price of the bond will be the PV of the expected cash flows from | |

the bond when discounted at 9%. The expected cash flows are the | |

maturity value [face value] of $1,000 and the 15 yearly interest income | |

of $70. | |

PV of the maturity value = 1000/1.09^15 = | $ 274.54 |

PV of the annual interest [annuity] using formula = 70*(1.09^15-1)/(0.09*1.09^15) = | $ 564.25 |

Value of the bond in 2020 |
$
838.79 |

2015 bought $1000 20 year 7% bond. if stayed the same
what is the value in 2020? show work & formula please

You bought a 10-year zero-coupon bond with a face value of
$1,000 and a yield to maturity of 2.7% (EAR). You keep the bond for
5 years before selling it. The price of the bond today is P 0 = F (
1 + r ) T = 1,000 1.027 10 = 766.12
If the yield to maturity is still 2.7% when you sell the bond at
the end of year-5, what is your personal ANNUAL rate of return?

Suppose that you bought a four year coupon bond with $10,000
face value, 6% coupon rate and 7% yield to maturity. After holding
it for a year and collecting the first coupon payment you decide to
sell it. Calculate the return (in %) on this investment if the
interest rate has just
dropped to 5%.
With Formula's Please

You bought a 10-year
zero-coupon bond with a face value of $1,000 and a yield to
maturity of 3.4% (EAR). You keep the bond for 5 years before
selling it.
The price of the bond
today is P0=F(1+r)T=1,0001.03410=P0=F(1+r)T=1,0001.03410= 715.8
If the yield to
maturity is still 3.4% when you sell the bond at the end of year-5,
what is your personal annual rate of return?

You just bought a 6% coupon bond for $1,065. The bond has a
7-year remaining maturity, a $1000 face value, and pays coupons
semiannually. What will be the value of your bond 3 years from now
if interest rates remain unchanged? please answer not using
excel!

A 20-year maturity bond with face value of $1,000 makes annual
coupon payments and has a coupon rate of 8.8%. (Do not round
intermediate calculations. Enter your answers as a percent rounded
to 3 decimal places.)
a. What is the bond’s yield to maturity if the bond is selling
for $980?
b. What is the bond’s yield to maturity if the bond is selling
for $1,000?
c. What is the bond’s yield to maturity if the bond is selling
for...

A bond has a face value of $1,000, a coupon rate of 8%, and a
maturity of 10 years. The bond makes semi-annual coupon
payments. The bond’s yield to maturity is
9%. In Excel, the =PV formula can be used to find the
price of the bond. Fill in the table with the
appropriate values:
RATE
NPER
PMT
FV
TYPE

Suppose you bought a 15-year $1,000 face-value bond for $945 one
year ago. The annual coupon rate is 7% and interest payments are
paid annually. If the price today is $995, the yield to maturity
must have changed from _____________ to ______________.
8.12%; 6.94%
7.12%; 8.11%
7.63%; 7.06%
9.11%; 9.35%
None of the above

A bond has a face value of $1,000, a coupon rate of 8%, and a
maturity of 10 years. The bond makes semi-annual coupon
payments. The bond’s yield to maturity is
9%. In Excel, the =PV formula can be used to find the
price of the bond. Fill in the table with the
appropriate values:
RATE
NPER
PMT
FV
TYPE
Repeat problem , but with annual coupon payments.
RATE
NPER
PMT
FV
TYPE

1. A 30-year bond has a face value of $1,000 and a 9% coupon
rate, paid semi-annually. a. You buy the bond today when it has a
yield to maturity of 7%. Compute the price of the bond today.

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