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Present Value and Market Price of Bonds Question

A bond has been issued with a $1,000 face value and a coupon rate of 7%. If the bond has a life of 30 years, pays annual coupons and the yield to maturity is 6.8% what will this bond sell for?

Solution Preview

A bond has been issued with a $1,000 face value and a coupon rate of 7%. If the bond has a life of 30 years, pays annual coupons and the yield to maturity is 6.8% what will this bond sell for?

To calculate the price of the bond we need to calculate / read from tables the values of

PVIF= Present ...

Solution Summary

This solution shows step by step how to calculate the pv factor for an annuity and the price of the bond. Calculations are provided in plain text and in an attached Excel file.

$2.19