Computation of pv and fv of a bond

Reference no: EM1316197

Calculation of annual payment considering time value of money.

Determine the amount of each payment to be made to a sinking fund with 10 annual payments compounded at 14% annually, in order that enough money will be available to pay off a loan of $5,000.

Computation of PV and FV of a bond.

Suppose you bought a bond that will pay $1,000 in 20 years. No intermediate coupon payments will be made. If the appropriate interest rate is 8%.

a. What is the current price of the bond?

b. What will the price be 10 years from today?

c. What will the price be 15 years from today?

Assume that the interest rate will not change over the life of the bond.

Reference no: EM1316197

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