A 15-year bond,purchased 5 years ago,has a $1,000 par value bond,a 10 percent coupon and a yield to maturity of 12%.Interest is paid annually.The bond's price is

Name: A 15-year bond,purchased 5 years ago,has a $1,000 par value bond,a 10 percent coupon and a yield to maturity of 12%.Interest is paid annually.The bond's price is
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The price of the bond = $887 =
 $100 \left( \frac { 1 - \frac { 1 } { 1.12 ^ { 10 } } } { .12 } \right) + \frac { 1000 } { 1.12 ^ { 10 } }$

A 15-Year Bond,purchased 5 Years Ago,has a $1,000 Par Value