Answer to Question #122951 in Finance for Natasha

Question

a coupon bond is purchased for $900 with the maturity period of 6 years. the coupon payment of $50 is to be paid at the end of each half year. if the desired rate of return (yield rate) is J2=12% p.a. , then the face value of the bond is;

Answer 1

$900=50*\frac{1/(1+0.12/2)^{12}-1}{1/1.06-1}+\frac{x}{1.06^{12}}$

x-the face value of the bond

$x=916.87$