On March 1, 2005, Matt purchased $63,000 of Lawson Co.'s 8%, 20-year bonds at face value. Lawson Co. has paid the annual interest due on the bonds regularly. On March 1, 2010, market interest rates had risen to 12%, and Matt is considering selling the bonds.
Using the present value table in in the attachments below, calculate the market value of Matt's bonds on March 1, 2010© BrainMass Inc. brainmass.com June 4, 2020, 12:45 am ad1c9bdddf
Number of coupon payments made=5
Number of coupon payments left=20-5=15
Coupon amount=8% of face value=63000*8%=$5040
Refer to table 6.5 attached in the question, PV for an annuity of 1 dollar when number of periods is ...
Solution depicts the steps to estimate market value of a coupon paying bond with the help of attached Present Value tables.