In: Finance
Calculate the amount to be paid by the buyer of the 10-year bond 20/05/2008-2018, at a fixed interest rate of 8.60%, with a par value of 500,000,000$, with price at 98.5 on
a) 20/06/2012
b) 20/04/2013
c) 20/07/2013.
Assuming annual payments
Price = Quoted price + accrued interest
Assuming annual payments Find the market rate | ||
Rate | 8.8320% | |
a) 20/06/2012 | Quoted price | $494,770,062.02 |
Accrued interest | 3583333.333 | |
Total Price | $498,353,395.35 | |
b) 20/04/2013 | Quoted price | $494,770,062.02 |
Accrued interest | 39416666.67 | |
Total Price | $534,186,728.69 | |
c) 20/07/2013. | Quoted price | $495,468,177.00 |
Accrued interest | 7166666.667 | |
Total Price | $502,634,843.66 |
Workings