Question

You own a 20-year, $1,000 par value bond paying 7 percent interest annually. The market price of the bond is $875, and your required rate of return is 10 percent.

Compute the bond’s expected rate of return.
Determine the value of the bond to you, given your required rate of return.
Should you sell the bond or continue to own it?

Answer 1

I think that you could add all of those numbers and I believe it would give you $ 1,912 par value bond paying . If I am l wrong please let me now.