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You are considering a 10-year, $1,000 par value bond. Its coupon rate is 9%, and interest...

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Finance

You are considering a 10-year, $1,000 par value bond. Its couponrate is 9%, and interest is paid semiannually. If you require an"effective" annual interest rate (not a nominal rate) of 8.16%,then how much should you be willing to pay for the bond?

Present value=

payment=

future value=

annual rate=

periods=

compounding=

Answer & Explanation Solved by verified expert
3.7 Ratings (687 Votes)
Par value future value 1000 Time 10 years2 20 semiannual periods Coupon rate 92 450 Coupon payment 00451000 45 Effective annual rate 816    See Answer
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Transcribed Image Text

You are considering a 10-year, $1,000 par value bond. Its couponrate is 9%, and interest is paid semiannually. If you require an"effective" annual interest rate (not a nominal rate) of 8.16%,then how much should you be willing to pay for the bond?Present value=payment=future value=annual rate=periods=compounding=

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