Question: A $6,500 bond pays interest at 5% compounded semi-annually. The bond is redeemable in 1 year 6 months and is purchased to yield 3%. Find

A $6,500 bond pays interest at 5% compounded semi-annually. The bond is redeemable in 1 year 6 months and is purchased to yield 3%.

  1. Find the purchase price of the bond.
  2. Calculate the premium or discount.
  3. Construct the appropriate bond schedule, including the totals for Bond Interest, Interest on Book Value at Yield, and Premium Amortized or Discount Accumulated.

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