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    Interest Rate Effect on Bond Price Valuation

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    Go to Table 10-1 (attached) which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decline from 11 percent to 8 percent:

    a.What is the bond price at 11 percent?
    b. What is the bond price at 8 percent?
    c. What would be your percentage return on investment if you bought when rates were 11 percent and sold when rates were 8 percent?

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    https://brainmass.com/business/bond-valuation/interest-rate-effect-on-bond-price-valuation-98157

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    a.What is the bond price at 11 percent?

    $920.3
    b. What is the bond price at 8 ...

    Solution Summary

    The solution calculates the bond price based on different interest rates.

    $2.19

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