What is the current price of the bonds

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Question - You want to buy a new house, but you are not sure what you can afford. What is the monthly payment for a 30 year loan with a 7% APR if the loan is for $195,000? What is the monthly payment for a 30 year loan with a 7% APR if the loan is for $220,000?

Your company issues 7% coupon bonds with a face value of $1,000. Suppose these bonds have 9 years to maturity, make semiannual payments, and have a yield to maturity of 10%. What is the current price of the bonds? If interest rates fall to 5%, what would the price be?

Reference no: EM132912138

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