A 4.5% annuity bond of $500 000 with interest payable quarterly is to be redeemable at par in seven years.
a) What is the purchase price to yield 6% compounded quarterly?
b) What is the book value after 6 years?
c) What is the gain or loss if the bond is sold six years after the date of purchase at 99.625?

Question

Quizplus · Accepted Answer

The Answer of A 4.5% annuity bond of $500 000 with interest payable quarterly is to be redeemable at par in seven years.
a) What is the purchase price to yield 6% compounded quarterly?
b) What is the book value after 6 years?
c) What is the gain or loss if the bond is sold six years after the date of purchase at 99.625?

A 45% Annuity Bond of $500 000 with Interest Payable Quarterly