Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you are considering a 10-year, $1,000 par value bo

You are considering a 10-year, $1,000 par value bond. Its coupon rate is 9%, and interest...

70.2K

Verified Solution

Question

Finance

You are considering a 10-year, $1,000 par value bond. Its couponrate is 9%, and interest is paid semiannually. If you require an"effective" annual interest rate (not a nominal rate) of 8.16%,then how much should you be willing to pay for the bond?

Present value=

payment=

future value=

annual rate=

periods=

compounding=

Answer & Explanation Solved by verified expert
3.7 Ratings (687 Votes)
Par value future value 1000 Time 10 years2 20 semiannual periods Coupon rate 92 450 Coupon payment 00451000 45 Effective annual rate 816    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

You are considering a 10-year, $1,000 par value bond. Its couponrate is 9%, and interest is paid semiannually. If you require an"effective" annual interest rate (not a nominal rate) of 8.16%,then how much should you be willing to pay for the bond?Present value=payment=future value=annual rate=periods=compounding=

Other questions asked by students

Statistics
1.2K views

Construct a 95% confidence interval for the standard deviation for both companies. Interpret and compare the results....

Physics
1.2K views

Consider a thick conducting shell of inner radius R outer radius R as shown in...

Geometry
1.2K views

Explain how to translate the point 2 5 west 4 units and north 2 units...

Basic Math
1.2K views

In a certain lottery, 3 different numbers between 1 and 8 are drawn. These are...

Calculus
1.2K views

Find the area of the part of the cone X Y Z that is over...

Algebra
1.2K views

13 10pt Find a 3 x 3 matrix U so that the matrix is diagonal...

Accounting
1.2K views

6 Required information Use the following information for the Quick Study below. (Algo) [The...

Accounting
1.2K views

According to the IAS 8 Hierarchy, the IASBs Conceptual Framework for Financial Reporting is a....

Accounting
1.2K views

Return to question Lavage Rapide is a Canadian company that owns and operates a large...

Accounting
1.2K views

contribuyente tiene ms de un empleador, cules son sus opciones si se retienen ms de...

Accounting
1.2K views

Powell Company began the Year 3 accounting period with $49,000 cash, $95,000 inventory, $69,000 common...

Finance
1.2K views

Your friend has 50/100/15 automobile insurance coverage. One night they lose control of their vehicle,...