Explore BrainMass

Explore BrainMass

    Finance: 12 year, 5% coupon bond

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Today is January 1. Starting today, Sam is going to contribute $140 on the first of each month to his retirement account. His employer contributes an additional 50% of the amount contributed by Sam. If both Sam and his employer continue to do this and Sam can earn a monthly rate of ½ of 1 percent, how much will he have in his retirement account 35 years from now?

    What is the future value of the following cash flows at the end of year 3 if the interest rate is 9%? The cash flows occur at the end of each year.
    Year 1 Year 2 Year 3
    $9,820 $0 $ 4510

    A 12-year, 5% coupon bond pays interest annually. The bond has a face value of $1,000. What is the change in the price of this bond if the market yield rises to 6% from the current yield of 4.5%?

    Party Time, Inc. has a 6% coupon bond that matures in 11 years. The bond pays interest semiannually. What is the market price of a $1,000 face value bond if the yield to maturity is 12.9%?

    © BrainMass Inc. brainmass.com June 4, 2020, 12:16 am ad1c9bdddf

    Solution Summary

    This solution answers four finance questions addressing, future values, earning rates and coupon bonds.