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    Price of a bond

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    The Florida Investment Fund buys 90 bonds of the Gator Corporation through a broker. The bonds pay 8 percent annual interest. The yield to maturity (market rate interest) is 10 percent. The bonds a 25-year maturity Using assumption semiannual interest payments: (a) Compute the price of a a bond. (b) Compute the total value of 90 bonds.

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    Solution Preview

    The Florida Investment Fund buys 90 bonds of the Gator Corporation through a broker. The bonds pay 8 percent annual interest. The yield to maturity (market rate interest) is 10 percent. The bonds a 25-year maturity Using assumption semiannual interest payments: (a) Compute the price of a a bond. (b) Compute the total value of 90 bonds.

    (a) Compute the price of a a bond.

    Calculating Price of bond
    Price of bond= PVIF * ...

    Solution Summary

    The price of a bond has been calculated.

    $2.49

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