Please include any formulas if applicable (so I can do more practice problems)
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%
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 ...
The solution determines the price (or present value) of the bond.