| Chapter 4 Question 5 |
| (a) |
| Assuming that the current interest rate is 4 percent, compute the following: |
| The present value of a five-year, 5 percent coupon bond with a face value of $1,000 (the present value is the current price of the bond). |
| Price of an annual coupon bond: |
| Face value | $ (1,000.00) | For face value, put in the negative of the face value. |
| Curent interest (discount rate) | 4% | Input numbers in green cells |
| Time to maturity | 5 |
| Coupon rate | 5% |
| Price (PV) of the bond | $1,044.52 |
| (b) |
| Assuming that the current interest rate is 2 percent, compute the following: |
| The present value of a five-year, 5 percent coupon bond with a face value of $1,000 (the present value is the current price of the bond). |
| Price of an annual coupon bond: |
| Face value | | For face value, put in the negative of the face value. |
| Curent interest (discount rate) | | Input numbers in green cells |
| Time to maturity |
| Coupon rate |
| Price (PV) of the bond | $0.00 |
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Chapter4Question5.xlsx
