Question #283364

what is the Price of U.S Coupon Bond issued in May 2018 and the Maturity date is May 2020 , with Par value $30 , yearly Coupon payments $5 ,and Interest Rate 7% ?

1
Expert's answer
2021-12-29T12:30:52-0500

The price is:

P=5×1−(1+0.07)−20.07+301.072=35.24.P = 5×\frac{1-(1+0.07)^{-2}} {0.07} + \frac{30} {1.07^2} = 35.24.


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