If you have $1000 par value bonds outstanding at 9% interest, will mature in 20 years and have a 6% yield, what is the current price? What equation do I use?

Printable View

- Aug 21st 2008, 12:34 PMdasiy08Bond Valuation
If you have $1000 par value bonds outstanding at 9% interest, will mature in 20 years and have a 6% yield, what is the current price? What equation do I use?

- Aug 21st 2008, 12:53 PMmathceleb
Assuming your redemption value is 1,000, the 9% is annual coupon rate, and the 6% yield is annual, I get 1,344.10. See here for all 4 price formulas of a bond. They all yield the same result, just different math.

Bond Price Formulas - Aug 21st 2008, 01:40 PMdasiy08Thank you
I got the same answer. Thank you!