What is the current price of the bonds

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Lance Whittingham IV specializes in buying deep discount bonds. These represent bonds that are trading at well below par value. He has his eye on a bond issued by the Leisure Time Corporation. The $1,000 par value bond with semiannual payments has 4 percent annual interest and has 10 years remaining to maturity. The current yield to maturity on similar bonds is 12 percent. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answers to 2 decimal places.)

a. What is the current price of the bonds? Use Appendix B and Appendix D.

Current price $

b. By what percent will the price of the bonds increase between now and maturity?

Price increases by %

c. What is the annual compound rate of growth in the value of the bonds? (Use Appendix A)

Annual compound rate %

Reference no: EM133000363

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