Formula used :
P= C( 1-1/(1+i)^t / i ) + F / (1+i )^t
Face bond is $1000
Q3:
The Pension Fund purchased 58 bonds issued by the Liquefied Gas Company through an intermediary. The interest rate on bonds is 10% annually, the discount rate or the required return is 12%, and the remaining period to maturity is 10 years. Required:
1- Calculate the price of the bond if it works, that the interest is paid annually.
2- Calculate the total value of the Bonds if the interest is annual
3- Calculate the price of the bond if the interest is paid semi-annually
4- Calculate the total value of the bonds in case the interest is semi-annual
Q4
Cox Pays 11% annual interest on the issued bonds, which are due to be repaid after 10 years. If the discount rate on similar bonds is 8%
1- Find the present value of the bond now?