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Imagine that you're looking at a bond with a 7% coupon rate, a Face Value of...

Imagine that you're looking at a bond with a 7% coupon rate, a Face Value of $1,000, and 13 years left to maturity. It makes annual coupon payments. How much should we be willing to pay for this bond if you need a yield to maturity of at least 8.4%?

What finance functions do I use on excel?

Solutions

Expert Solution

We need to find price of the bond , we can find it using pv function in excel with input as

Price = PV(rate,n,pmt,fv)

PMT = 7%*1000 = 70

Price willing to pay for bond = 891.74

jeff jeffy answered 2 years ago
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