Question

In: Finance

You purchase 6,500 bonds with a par value of $1,000 for $981 each. The bonds have...

You purchase 6,500 bonds with a par value of $1,000 for $981 each. The bonds have a coupon rate of 10.4 percent paid semiannually and mature in 10 years.

A. Next Payment is ______

B. Payment at maturity _______

Solutions

Expert Solution

The next payment is the semi annual coupon

Semi annual coupon per bond = 10.4%*1000/2 = $52

A. The next payment per bond = $52

The next payment total = 6500*52= $338000

B. Payment at maturity is the face value

Payment at maturity for one bond = $1000

Payment at maturity total = 6500*1000 = $6500000

jeff jeffy answered 2 years ago
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