Annuity three years prior to first payment being made

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Reference no: EM131930928

1. Bank of America bonds are currently trading at $952.31. The bonds have a face value of $1,000, a coupon rate of 8% with payments made semi-annually, and mature in 20 years. What is the yield to maturity?

2. A perpetuity-immediate pays 50 per quarter, and has a present value of 2000 at an annual effective interest rate of i. A 30-year annuity pays 10000 at the end of every two year period. Using the interest rate i, calculate the value of the 30-year annuity three years prior to its first payment being made. Give your answer rounded to the nearest whole number.

Reference no: EM131930928

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