7. A bond has a residual value of $ 10,000, a coupon interest rate of 6%,...
7. A bond has a residual value of $ 10,000, a coupon interest rate of 6%, pays the interest anualy and has a maturity of 20 years. Calculate the value of the bond if the required rate of return is 8%. What is also the value of the bond.
Homework Answers
Face value of the bond (FV) = $ 10,000
Annual coupon(PMT) = 6% * 10,000 = $ 600
Periods to maturity (nper) = 20
Required rate of return (rate) = 8%
Value of the bond (PV) = ![=pv(8%,20,600,10000 PV (rate, nper, pmt, [fv], [type])](http://img.homeworklib.com/questions/9aecb7e0-79f0-11eb-b3fd-2183c09de683.png?x-oss-process=image/resize,w_560)
= $
8,036.37
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