Explore BrainMass

Cash Flow Time and Bond Valuation

Please use Excel and show a cash flow time line to solve the following:

I'm purchasing a 10-year bond with a $1,000 face value that pays interest of $60 semiannually. The yield to maturity is 10 percent with semiannual compounding. What price should I pay for the bond?

Solution Summary

This solution finds the price one should pay for a bond with semiannual compounding.