Question

A 2000 11% ten-year bond has semiannual coupons and is sold to yield 5.2% covertible semiannually. the discount on the bond is $83.28. find the redemption amount

Answer 1

Answer:. The redemption amount is 4438.18

Explanation:

Given:

F= 2000,

r= 5.5%,

Fr= 110,

j= 2.6%, 20 payments.

Then,

P=C-83.28 P= 110a20|2.6%+C(1 + 2.6%)-20, then,

C= 4438.18.

Therefore,

The redemption amount is 4438.18