Question

Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 8 years remaining to maturity, and have a required rate of return of 13 percent. a. The bond has a 8.4 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) b. The bond has a 10.4 percent coupon rate. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16) c. The bond has a 13 percent coupon rate. (Do not round intermediate calculations.) a. Fair present value b. Fair present value c. Fair present value

Answer 1

please find below the solution..please provide rating...

a)	we have to use financial calculator to sovle this problem
	Put in calculator
	FV		1,000
	PMT	=1000*8.4%/2	42
	I	=13%/2	6.50%
	N	=8*2	16
	compute PV		($775.34)
	Therefore fair present value =			$775.34
b)	we have to use financial calculator to sovle this problem
	Put in calculator
	FV		1,000
	PMT	=1000*10.4%/2	52
	I	=13%/2	6.50%
	N	=8*2	16
	compute PV		($873.02)
	Therefore fair present value =			$873.02
c)	we have to use financial calculator to sovle this problem
	Put in calculator
	FV		1,000
	PMT	=1000*13%/2	65
	I	=13%/2	6.50%
	N	=8*2	16
	compute PV		($1,000.00)
	Therefore fair present value =			$1,000.00