[Need help for part C, no Excel please. try to learn it from test, thanks!]...
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[Need help for part C, no Excel please. try to learn it from test, thanks!]
2 years ago, you purchased at par a 10-year, 10 percent semi-annual coupon bond, with a face value of $1,000. Today. The market rate of interest is 6%.
a. What was the market rate of interest (discount rate) at the time you purchased the bond? Answer = 10%
b. Suppose you wish to sell the bond today, how much can you sell it for? Answer = $1,251.2220
c. What is your rate of return on the bond if all coupons were reinvested in your bank account, which pays 1% interest per year until the bond is sold 2 years after owning it?
[Cannot figure out part C:( ]
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