kbowman7173 kbowman7173

23-11-2019
Business

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A 25-year, $1,000 par value bond has an 8.5% annual payment coupon. The bond currently sells for $925. If the yield to maturity remains at its current rate, what will the price be 5 years from now?
a. $884.19
b. $906.86
c. $930.11
d. $953.36
e. $977.20

Respuesta :

Karabo99 Karabo99

23-11-2019

Answer:

c. $930.11

Explanation:

N =25

I =?

PV = -925

PMT = 85

FV = 1000

I = 9.28%

N = 20

I = 9.28%

PV = ?

PMT = 85

FV = 1000

Therefore, The price in 5 years from now will be $930.11

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