Create a full amortization schedule for Example 6.9 Example 6.9: Consider a $100 face value bond with coupon rate of 4.0% per annum paid semiannually. The spot rates of interest in the market are given by 5.0 5.0 j (year) 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 i (%) 3.0 3.0 3.5 3.5 4.0 4.0 4.5 4.5 5.0 Find the price of the bond if it matures in (a) 3 years, and (b) 5 years. Solution: For (a), the price of the bond is 1 1 1 1 100 P = 2 + + + + + + 1.015 1.0152 1.01753 1.01754 1.026 100.0608. 1 1 1.025 1.026 Similarly, for (b), the price of the bond is 1 1 1 1 1 P + + + + + 2 (1.015 95.9328. 100 1.02510 1.0152 1.02258 1.0259 1.02510