Question

Jackson Corporation’s bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds?

Answer 1

Answer:

$928.39

Explanation:

In this question, we use the present value formula which is shown in the spreadsheet.  

The NPER represents the time period.

Given that,  

Future value = $1,000

Rate of interest = 9%

NPER = 12 years

PMT = $1,000 × 8% = $80

The formula is shown below:

= PV(Rate;NPER;PMT;FV;type)

So, after solving this, the answer would be $928.39