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Financial calculator time-value-of-money calculations

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Reference no: EM132154611

Using a Financial Calculator's Time-Value-of-Money Calculations (recommended), solve the following

Scenario 1. A $3,000 Bond with a maturity of 9 years has been purchased by Etsuko. It has a Semi-Annually coupon of $71.25 and Etsuko paid $2,791.5 for the bond which is compounded Semi-Annually.

a) What is the yield of the bond?

 =

b)What is the Coupon Rate?

c) Is the bond being sold at a Premium/Discount/PAR?

Scenario 2. Cameron needs a yield of at least 5.5% on any investment he makes to achieve his goals. He asked you to check if this bond he was offered meets that criteria. The bond has a maturity value of $1,000 in 10 years. It pays Semi-Annually coupons at a rate of 7%. It is compounded Semi-Annually. Cameron has been offered the bond at a price of $1,147.63.

a) What is Present Value of the Par Value?

(Do not include PMT)

 =

b) What is the Coupon Payment?

 =

c) Find the PV of the Coupon Payment?

(Do not include PV)

 =

d) hat is the maximum price Cameron will pay for the bond?

(Check your Answers for Question 1 and  Question 3. Do they add to this answer?)

 =

e) Should Cameron buy the bond?

=

Scenario 3. Edmond wants to purchase a $14,250 Bond with a maturity of 11 years that has a Semi-Annually coupon with a rate of  5.75% and a yield of 9.25%. The Bond is compounded Semi-Annually.

a) What is the Coupon Payment Amount?

 =

b) What is the Price Edmond should pay for the Bond?

c) Is the bond being sold at a Premium or A Discount?

>At Par

>Premium

>Discount

d) How much was the Premium or Discount of the Bond?

Reference no: EM132154611

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