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Home Q & A Board Science-Related Homework Help Mathematics
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Hillier Hillier
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Posts: 550
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6 years ago
A $100 000, 7.5% bond with semi-annual coupons redeemable at 106 is bought three years before maturity to yield 8% compounded semi-annually. What is the purchase price?
Textbook 
Contemporary Business Mathematics with Canadian Applications

Contemporary Business Mathematics with Canadian Applications


Edition: 11th
Authors:
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wrote...
#1
6 years ago
FV = $100 000(1.06) = $106 000; P/Y = C/Y = 2; PMT = $100 000  = $3 750; n = 3(2) = 6
PP = 106000.00(1.04)-6 + 3750.00
   = 106000.00(.7903145257) + 3750.00(5.242136857)
   = 83773.34 + 19658.01 = $103 431.35
Hillier Author
wrote...
#2
6 years ago
Correct, thank you
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