By how much will a bond increase in price over the next year if it currently sells for $925.16, has 5 years until maturity, and an annual coupon rate of 7%? (Do not round intermediate calculations.)
A) $8.26
B) $8.92
C) $12.53
D)$11.98

Question

Quizplus · Accepted Answer

Using a financial calculator:n = 5, PV = -$925.16, PMT = $70, FV = $1,000, CPT i = 8.92n = 4, i = 8.92; PMT = $70; FV = $1,000; CPT PV = $937.69Price increase = $937.69 - 925.16 = $12.53

By How Much Will a Bond Increase in Price Over