In: Finance
What is the price of a 40 year 4% bond? Suppose similar bonds have a yield to maturity of 5%
Computation Of Bond Price | ||
a | Annual Coupon Amount | $ 40.00 |
b | Present Value Annuity Factor for (40 Years,5%) | 17.159086 |
c | Present Value Of Annual Interest (a*b) | $ 686.36 |
d | Redemption Value | $ 1,000.00 |
e | Present Value Of (40 Years,5%) | 0.14205 |
g | Present Value Of Redemption Amount (d*e) | $ 142.05 |
f | Bond Price(c+g) | $ 828.41 |