Two bonds outstanding, both pay $100 annual interest plus $1000 at maturity. Bond 1 has a maturity of 15 years, bond 2, (1) year. What is the value of each of these bonds at the going interest rate of:
2. 8 %
3. 12 %
Assume there is only one more interest payment to be made on bond 2.© BrainMass Inc. brainmass.com October 1, 2020, 8:18 pm ad1c9bdddf
The solution calculates the value of two bonds at different interest rates.