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Financial Technology Center - School of Business - Central Connecticut State University |
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$1,000 par value bond with quarterly payment will mature in
10 years. If your nominal annual required rate of return is 12
percent and the an annual coupon is 14 percent , how much should you
be willing to pay for this bond? Inputs: N = 10 * 4 . I = 12 / 4 . PMT = ( Par Value * The coupon rate) / F = ( 1000 * 0.14 ) / 4 = 35. FV= 1000 . Financial calculator solution Output: Price= PV= $1,115.57
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