Question

Calculate the market value (amount of cash proceeds) of the $1,000,000 bond we are selling given...

Calculate the market value (amount of cash proceeds) of the $1,000,000 bond we are selling given that the annual contract rate is 4%, market interest rate is 5%, and the bond is due in 7 years. Assume interest is paid every six months. Show your working

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Answer #1

Calculation of market value of bond that is cash proceeds received on bond is calculated as shown below

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