The Florida investment Fund buys 90 bonds of the Gator Corp. through a broker. The bonds pay 8% annual interest. The yield to maturity is 10%. The bonds have a 25 year maturity
Using an assumption of semiannual interest payments:
a. Compute the price of a bond .Need to calculate payments for interest then principle.
b. Total value of 90 bonds?© BrainMass Inc. brainmass.com June 4, 2020, 1:10 am ad1c9bdddf
a. The price of the bond is the present value of interest and principle. The semi annual interest is 1,000 X 8%/2 = $40, periods to maturity are 25X2 = ...
This solution helps answer questions about semiannual bonds.