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A $50,000 bond bearing interest at 6.5% bond payable semi-annually matures in 3 years. a)If the...

A $50,000 bond bearing interest at 6.5% bond payable semi-annually matures in 3 years.

a)If the bond is bought when market rates are at 4.5% compounded semi-annually, what is the purchase price of the bond? Please do calculations of each individual cash flow using the table format used in class.

b)Price the same bond using the annuity approach where appropriate.

c)What was the total dollars of interest earned by the investor?(If you didn’t get an answer to a, assume a price of $48,200)

d)What was the effective annual interest rate earned by the investor?

  

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