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Find the present value of a bond with a maturity date 16 years from now, 14% yearly coupons, and a face value of $15,000, giv

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Answer #1

Annual coupon = 0.14 * 15,000 = 2,100

Present value = Annuity * [1 - 1 / (1+r)n] / r + Fv / (1 + r)n

Present value = 2100 * [1 - 1 / (1 + 0.12)16] / 0.12 + 15000 / (1 + 0.12)16

Present value = 2100 * [1 - 0.163122] / 0.12 + 2,446.824928

Present value = 2100 * 6.973983 + 2,446.824928

Present value = $17,092

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