The State Pension System wants to sell a 20 year original maturity General Industries bond that it purchased 10 years ago The bond pays interest twice each year The par value of the bond is $ 100,000,000 The coupon rate is 8 6 percent If the current market interest rate is 4 5 percent and there are...

tr msoheightsourceauto col msowidthsourceauto br msodataplacementsamecell style45 msonumberformat00220022 00000220022 00000220022 00220022 msostylenam ...

The State Pension System wants to sell a 20- year original maturity General Industries bond that it

Question:

The State Pension System wants to sell a 20- year original General Industries’ bond that it purchased 10 years ago. The bond pays interest twice each year. The of the bond is $ 100,000,000. The rate is 8.6 percent. If the current market interest rate is 4.5 percent and there are exactly 10 years left until how much will the pension plan be paid for the bond? (Be sure to show all of your work, including the factors you used to deter-mine the value of the bond.)
A. Solve using a spreadsheet program such as Excel.
B. Solve using a financial calculator.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...