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    Bond Value

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    You have the opportunity to buy a $1,000 bond which matures in 10 yrs. The bond pays 13% interest annually and you will receive interest payments every six months. The current yield is 10%. What is the most you would be willing to pay for this bond presently?

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    Solution Preview

    Please see the attached file:
    You have the opportunity to buy a $1,000 bond which matures in 10 yrs. The bond pays 13% interest annually and you will receive interest payments every six months. The current yield is 10%. What is the most you would be willing to pay for this bond presently?

    Calculating Value of a bond
    To calculate the price of the bond we need to calculate / read from tables the values ...

    Solution Summary

    This solution calculates the bond value.

    $2.19

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