I have a two part question, the first part I think is right, I would appreciate if you would look it over. The second part I am not sure about. Here goes:
A bond wioll pay $10,000 when it come due in 15 years. what is the price of the bond if the yield is to be 9% per annum compounded annually?
I used the Equation P = A*(1+i) ^n and the equation is 10,000 = A(1+.09)^15. Solving for A:
A = $2,745.38
The other part of the question asks:
When the bond has only 10 years left to maturity, it is offereed for sale at $3855.43. I am asked to estimate the yield on the bond if it is then purchased and held to maturity.
Thank you for your help!