Bond #1: 10 Year Maturity

Bond #1 is a 10 year, 4.5% semiannual coupon bond. It has a par/face value of $5,000 and may be called in 6 years at a call price of $7,500. The bond sells for $5,250. Complete the information in the table below.

Bond Information

Formulas

Years to maturity:

10

How long it is for

Periods per year:

2

Number of times it pays interest

Periods to maturity:

number of years x number of payment periods 25 years x 2 period

Coupon rate:

4.5%

Your interest rate

Par/face value:

$5,000

Face value...aka the value of the bond

Periodic payment:

Par value x (coupon rate / periods per year)

Current price

$5,250

Sale price

Call price:

$7,500

Amount paid should the bond be called early...aka the person using the bond money pays their loan off early

Years till callable:

6

When they can call it in, meaning pay you the $6000 for it

Periods till callable:

number of years x number of periods