Question

Guggenheim offers a bond with annual payments and a coupon rate of 5 percent. The yield to maturity is 5.62 percent and the maturity date is 9 years away. What is the market price of a $1,000 face value bond?

Answer 1

$957.12

Step-by-step explanation:

In this question we have used the formula of the present value which is shown in the attachment

The NPER is a time period and the PMT is the monthy payments

Provided that,

Future value = $1,000

Rate of interest = 5.62%

NPER = 9 years

PMT = $1,000 × 5% = $50

The formula is shown below:

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

So, after solving this, the answer is $957.12