What dollar amount will the investor pay to the seller today

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Miller Mining has $30 million in land value and $15 in mortgage bonds issued on the property. These bonds were originally issued at par ($1000), but are now selling today (April 1) based on a 7.75%, compounded semi-annually, market rate of return. The bonds have a stated interest rate of 8% and mature on January 1, 10 years from today. The bonds pay interest semi-annually on July 1 and January 1 each year. Suppose that an investor buys a $1,000 face value bond today.

Problem 1: What dollar amount will the investor pay to the seller today?

Reference no: EM132964092

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