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Math Help - Bond Valuation

  1. #1
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    Bond 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?
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  2. #2
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    Quote Originally Posted by dasiy08 View Post
    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?
    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
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  3. #3
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    Thank you

    I got the same answer. Thank you!
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