Explore BrainMass
Share

Explore BrainMass

    Present Value of Bond Calculation

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

    Given a 5 year instrument with a face value amount of $1000 an annual interest rate of 9%, with semiannual interest payments and repayment at the end of 5 years, set up the calculation of the PV of cash flows at 11% yield. Would the value of this note be greater than, less than or equal to $1000? Why?
    **Please write out formula manually or attach versus excel calculation.

    © BrainMass Inc. brainmass.com October 10, 2019, 7:45 am ad1c9bdddf
    https://brainmass.com/business/bond-valuation/present-value-bond-calculation-593788

    Solution Preview

    The present value is less than face value because the market ...

    Solution Summary

    The solution computes present value of bond with semi-annual payments in an excel spreadsheet.

    $2.19