# Price of bond

I whish to purchase a 20-year bond that has a maturity value of $1,000 and makes semiannual interest payments of $40. I require a 10 percent nominal yield to maturity on this investment, what is the maximum price I should be willing to pay for the bond?

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#### Solution Preview

I wish to purchase a 20-year bond that has a maturity value of $1,000 and makes semiannual interest payments of $40. I require a 10 percent nominal yield to maturity on this investment, what is the maximum price I should be willing to pay for the bond?

Maximum price = discounted value of cash inflows

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

#### Solution Summary

The solution calculates the value of a bond.

$2.19