Compute the present value of a five-year

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Reference no: EM131521802

Assuming that the current interest rate is 3 percent, compute the present value of a five-year, 5 percent coupon bond with a face value of $500. What happens when the interest rate goes to 4 percent? What happens when the interest rate goes to 2 percent?

Instruction: Round your answers to the nearest penny (2 decimal places).

PV at an interest rate of 3% = $

PV at an interest rate of 4% = $

The present value (Click to select) fallsrises when the interest rate rises to 4 percent. PV at an interest rate of 2% = $ The present value (Click to select) risesfalls when the interest rate falls to 2 percent.

Reference no: EM131521802

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