What is the purchase price of a bond that is issued on May 1,2002 for 22 years at a coupon
rate of 9.4% compounded semi-annually? The maturity date of the bond is May 11,2007 and the yield
rate is 8.5% compounded semi-annually. The bond has a face value of $5000 and it is redeemable
at par.
I have FV= 5000 PMT= 235 i=.0425 n=5.5
5000(1.0425^-5.5) + 235(1-1.0425^-5.5)/.0425
5000(.795393) + 235(4.814282)
3976.965000 + 1131.356353 = 5108.321353
The answer is not correct could someone help me find out where I went wrong?
rate of 9.4% compounded semi-annually? The maturity date of the bond is May 11,2007 and the yield
rate is 8.5% compounded semi-annually. The bond has a face value of $5000 and it is redeemable
at par.
I have FV= 5000 PMT= 235 i=.0425 n=5.5
5000(1.0425^-5.5) + 235(1-1.0425^-5.5)/.0425
5000(.795393) + 235(4.814282)
3976.965000 + 1131.356353 = 5108.321353
The answer is not correct could someone help me find out where I went wrong?