In: Finance
Computing the Present Value of a Debt Security
Compute the present value of a five-year bond with a face value of $2,000, a 10% annual coupon payment, and an 8% effective rate.
Round answers to two decimal places.
$Answer
Solution :
The present value of a five-year bond with a face value of $ 2,000, a 10% annual coupon payment, and an 8% effective rate = $ 2,159.71
Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.