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15 year, 12% bond with $100 000 ON 1 September of 2011 – prepare to pay...

15 year, 12% bond with $100 000 ON 1 September of 2011 – prepare to pay for this bond if it is now September 2018 and rate of return is 14%

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A 15 year bond issued on 1 September 2011 has 8 years of remaining maturity on 1 September 2018. Price of this bond on 1 September 2018 is $ 907.22 calculated using the PV function of Excel as below.

Note: coupon payment frequency is assumed as annual.

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