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    Bond Maturity

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    How much should you pay for a $1,000 bond with 10% coupon, annual payments, and five years to maturity if the interest rate is 12%

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    Face Value = 1000
    Coupon Rate = 10%
    So annual payment = .10 X 1000 = 100
    Interest Rate = 12%

    If you want to use a financial calculator, all you have to do is plug in the above values and ...

    Solution Summary

    The solution determines the price (or present value) of the bond.