A year ago,Jasper Inc.sold 20-year bonds at par with a coupon rate of 4.5 percent and semiannual payments.The face value of each bond is $1,000 and the yield to maturity is now 5.6 percent.What is the current value of each bond?

Question

Quizplus · Accepted Answer

Bond value = [(0.045 × $1,000)/ 2] × ({1 - 1 / [1 + (0.056 / 2)]¹⁹^×2} / (0.056 / 2))+ {$1,000 / [1 + (0.056 / 2)]^19×2} = $872.35 11ea5bb7_de32_4295_8724_25faee0e3d45_TB1005_00

A Year Ago,Jasper Inc