Using the same basic format as in 17 3, we can solve for bond price be entering the settlement date, the maturity date, the annual coupon rate, the ytm, the par value of the bond expressed as a percentage (100), and the number of coupons per year Use the function PRICE (A1, A2, A3, A4, A5, A6) Prob...

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Using the same basic format as in 17-3, we can solve for bond price be entering the

Question:

Using the same basic format as in 17-3, we can solve for bond price be entering the settlement date, the date, the annual rate, the ytm, the of the bond expressed as a percentage (100), and the number of coupons per year. Use the function = PRICE (A1, A2, A3, A4, A5, A6). Problem—solve for the price of a six year, 7 percentage bond if the ytm is 8.25 percent.

1/1/2007 Settlement date = YEAR (year, month, day)*
1/1/2010 Maturity date = YEAR (year, month, day)*
0.1 Annual rate
105.242 Bond price
100 Face value = payments per year
0.08 Yield to as a decimal
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,...