principles of fincnace week 7
tedy.r
week_07_example_problems.xlsSheet1
| a. | ||
| Rate | 4% | |
| Nper | 20 | |
| pmt | $30 | |
| fv | $1,000 | |
| type | 0 | |
| PV | ($864.10) | |
| b. | ||
| Rate | 4% | |
| Nper | 10 | |
| pmt | $30 | |
| fv | $1,000 | |
| type | 0 | |
| PV | ($918.89) | |
| d. | ||
| Yield to Maturity | ||
| Nper | 20 | 10 |
| PMT | $30 | $30 |
| PV | ($864.10) | ($918.89) |
| FV | $1,000 | $1,000 |
| Type | 0 | 0 |
| Semi-Annual Rate | 4% | 4% |
| Annual Rate | 8% | 8% |
Most bonds have semi-annual coupons (pay interest twice per year), so you will need to divide the interest rate in half and multiply the Nper by two to calculate a one-half year payment.
