Calculate the price of bonds,Effective interest 1 more to grade: Bond No. 1: A $200,000, 3 year,12%

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Question:

Calculate the price of bonds,Effective interest 1 more to grade:

Bond No. 1:

A $200,000, 3 year,12% bond , interest payable 4 times per year. Market rate is 12%

Bond No. 2

A $300,000, 5 year, 8% bond, interest payable once per year, Market rate is 10%.

Bond No. 3:

A $500,000, 10 year, 10% bond. Interest payable 2 X per year. Market rate is 10%.

Required:
1. Calculate the price of the bond.

2. Construct the effective interest table for each of the bonds.

Related Book For answer-question

Precalculus

ISBN: 9781938168345

1st Edition

Authors: Jay Abramson

See More Books

Posted Date: May 25, 2023 01:52 AM

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Calculate the price of bonds,Effective interest 1 more to grade: Bond No. 1: A $200,000, 3 year,12%

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Expert Answer:

To calculate the price of a bond you can use the present value formula The present value of a bond is the sum of the present values of its future cash flows which are the periodic interest payments an... View the full answer

Precalculus

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