Question

Please show your math/calculator key strokes (i.e. N=?; I=?; FV=?; I/YR=?)

1.) *$1,000 Face Value* You are considering the purchase of a 15 year zero coupon bond with a face value of 8.25%.
The bond is priced to yield a semiannual return of 8.25%.
How much interest will you receive over the life of the bond?
When will you receive that interest?
What is the price or present value of the bond?


2.) A three year bond with a face value of $1000 pays an annual coupon of 6%.
What would the price be if it is yielding 5%?

3.) A zero coupon bond matures three years from today, has a par value of $1000 and is priced to yield 8.5%, compounded semiannually. What is the price?

Answer 1