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w is information about three $10000 par value bonds, each of which pays coupon semiannually. The required rate of return on each bond is 14%. Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value. Bond Coupon Rate (%) Maturity (years)       1 8 5 2 14 10 3 16 15   2. Using the Interpolation Method to calculate the YTM for the below Bonds: > The par value $18000 > Coupon Rate 10% every year

w is information about three $10000 par value bonds, each of which pays coupon semiannually. The required rate of return on each bond is 14%. Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value. Bond Coupon Rate (%) Maturity (years)       1 8 5 2 14 10 3 16 15   2. Using the Interpolation Method to calculate the YTM for the below Bonds: > The par value $18000 > Coupon Rate 10% every year

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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1. Below is information about three $10000 par value bonds, each of which pays coupon semiannually. The required rate of return on each bond is 14%.

Calculate the value of the bonds and determine whether the bond is selling at discount, premium or par value.

Bond

Coupon Rate (%)

Maturity (years)

 

 

 

1

8

5

2

14

10

3

16

15

 

2. Using the Interpolation Method to calculate the YTM for the below Bonds:

> The par value $18000

> Coupon Rate 10% every year

> Maturity period 10 years

> Market Value of bond $21800

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Coupon rate=8%

Annual coupon=0.08 x 10000=$800

Maturity period=n=5years

Price of bond=Coupon x 1-(1+r)-nr+10000(1+r)n=80 x 1-1.14-50.14+100001.145=$7940.15

Price of bond=$7940.15

Please explain the answer how to get $7940.15. Is it possible to calculate using Vb = I (PVIFA kb%, n ) + M (PVIFkb%, n) to find the value of bond?

Attached together the PVIF & PVIFA table below for references. Thank you!

Period 1% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Table A-3 Present Value Interest Factors for One Dollar Discounted at k Percent for n Periods: PVIF kn = 1/(1+k)" 2% 3% 4% 5% 6% 0.9709 0.9615 0.9524 0.9434 8% 9% 10% 11% 12% 0.9259 0.9174 0.9091 0.9009 0.8929 0.8573 0.8417 0.9706 0.9423 0.9151 0.7938 0.7722 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.9901 0.9604 0.9803 0.9612 7% 0.9346 0.9246 0.9070 0.8900 0.8734 0.8890 0.8638 0.8396 0.8163 0.9426 30 35 36 40 50 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5346 0.5066 0.4803 0.4556 0.4323 0.4104 0.3349 0.2751 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4817 0.4523 0.4251 0.3996 0.3759 0.3538 0.2791 0.2218 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4339 0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3909 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3522 0.4039 0.3762 0.3506 0.3269 0.3050 0.2326 0.1789 0.1678 0.3606 0.3329 0.3075 0.2843 0.2630 0.1938 0.1443 0.1342 0.3220 0.2946 0.2697 0.2472 0.2267 0.1615 0.1164 0.1074 0.6232 0.8528 0.7284 0.5339 0.4581 0.3936 0.8444 0.7142 0.6050 0.5134 0.4363 0.3714 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 13% 14% 15% 16% 20% 24% 25% 30% 0.8850 0.8772 0.8696 0.8621 0.8333 0.8065 0.8000 0.7692 0.8264 0.8116 0.7972 0.7831 0.7695 0.7561 0.7432 0.6944 0.6504 0.6400 0.5917 0.7513 0.7312 0.7118 0.6931 0.6750 0.6575 0.6407 0.5787 0.5245 0.5120 0.4552 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718 0.5523 0.4823 0.4230 0.4096 0.3501 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972 0.4761 0.4019 0.3411 0.3277 0.2693 0.5268 0.4751 0.8963 0.8043 0.7224 0.6496 0.5847 0.4289 0.3875 0.3505 0.3173 0.2875 0.2607 0.2366 0.2149 0.1954 0.1346 0.0938 0.0859 0.0558 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2858 0.2567 0.2307 0.2076 0.1869 0.1685 0.1122 0.0757 0.0687 0.0429 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2575 0.2292 0.2042 0.1821 0.1625 0.1452 0.0935 0.0610 0.0550 0.0330 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.1597 0.1413 0.1252 0.0779 0.0492 0.0440 0.0254 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.1401 0.1229 0.1079 0.0649 0.0397 0.0352 0.0195 0.2633 0.2320 0.2046 0.1807 0.2394 0.2090 0.1827 0.1599 0.8114 0.6598 08034 0.6468 0.5375 0.4388 0.3589 0.2942 0.2415 0.1987 0.1637 0.5219 0.4220 0.3418 0.2775 0.2257 0.1839 0.1502 0.5067 0.4057 0.3256 0.2618 0.2109 0.1703 0.1378 0.4919 0.3901 0.3101 0.2470 0.1971 0.1577 0.1264 0.7798 0.6096 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.7954 0.6342 0.7876 0.6217 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.3387 0.1229 0.1069 0.0930 0.0541 0.0320 0.0281 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.1252 0.1078 0.0929 0.0002 0.0451 0.0258 0.0225 0.2959 0.2502 02120 0.1799 0.1528 0.1300 0.1108 0.0946 0.0808 0.0691 0.0376 0.0208 0.0180 0.2765 0.2317 0.1945 0.1635 0.1377 0.1161 0.0981 0.0829 0.0703 0.0596 0.0313 0.0168 0.0144 0.2584 0.2145 0.1784 0.1486 0.1240 0.1037 0.0668 0.0728 0.0611 0.0514 0.0261 0.0135 0.0115 0.7419 0.5521 0.4120 0.3083 0.2314 0.1741 0.1314 0.0994 0.0754 0.7059 0.5000 0.3554 0.2534 0.1813 0.1301 0.0937 0.0676 0.0490 0.6989 0.4902 0.3450 0.2437 0.1727 0.1227 0.0875 0.0626 0.0449 0.6717 0.4529 0.3066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.6060 0.3715 0.2281 0.1407 0.0872 0.0543 0.0213 0.0134 0.0339 0.1351 0.1117 0.0926 0.0768 0.0638 0.0531 0.1228 0.1007 0.0826 0.0680 0.0560 0.0462 0.1117 0.0907 0.0738 0.0601 0.0491 0.0402 0.1015 0.0817 0.0659 0.0532 0.0431 0.0349 0.0588 0.0471 0.0923 0.0736 0.0378 0.0304 0.2621 0.2072 0.2097 0.1594 0.1226 0.0943 0.0725 0.0443 0.0217 0.0109 0.0092 0.0382 0.0181 0.0088 0.0074 0.0329 0.0151 0.0071 0.0059 0.0284 0.0126 0.0057 0.0047 0.0245 0.0105 0.0046 0.0038 0.0573 0.0437 0.0334 0.0256 0.0196 0.0151 0.0116 0.0042 0.0016 0.0356 0.0259 0.0189 0.0139 0.0102 0.0075 0.0055 0.0017 0.0005 0.0323 0.0234 0.0169 0.0123 0.0089 0.0065 0.0048 0.0014 0.0221 0.0154 0.0107 0.0075 0.0053 0.0037 0.0026 0.0007 0.0085 0.0054 0.0035 0.0022 0.0014 0.0009 0.0006 . 0.0012 . . . . 0.0150 0.0116 0.0089 0.0068 0.0053 0.0040 0.0031 0.0024 0.0018 0.0014 .
Transcribed Image Text:Period 1% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Table A-3 Present Value Interest Factors for One Dollar Discounted at k Percent for n Periods: PVIF kn = 1/(1+k)" 2% 3% 4% 5% 6% 0.9709 0.9615 0.9524 0.9434 8% 9% 10% 11% 12% 0.9259 0.9174 0.9091 0.9009 0.8929 0.8573 0.8417 0.9706 0.9423 0.9151 0.7938 0.7722 0.9610 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.9901 0.9604 0.9803 0.9612 7% 0.9346 0.9246 0.9070 0.8900 0.8734 0.8890 0.8638 0.8396 0.8163 0.9426 30 35 36 40 50 0.9420 0.8880 0.8375 0.7903 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5346 0.5066 0.4803 0.4556 0.4323 0.4104 0.3349 0.2751 0.9327 0.8706 0.8131 0.7599 0.7107 0.6651 0.6227 0.5835 0.5470 0.5132 0.4817 0.4523 0.4251 0.3996 0.3759 0.3538 0.2791 0.2218 0.9235 0.8535 0.7894 0.7307 0.6768 0.6274 0.5820 0.5403 0.5019 0.4665 0.4339 0.9143 0.8368 0.7664 0.7026 0.6446 0.5919 0.5439 0.5002 0.4604 0.4241 0.3909 0.9053 0.8203 0.7441 0.6756 0.6139 0.5584 0.5083 0.4632 0.4224 0.3855 0.3522 0.4039 0.3762 0.3506 0.3269 0.3050 0.2326 0.1789 0.1678 0.3606 0.3329 0.3075 0.2843 0.2630 0.1938 0.1443 0.1342 0.3220 0.2946 0.2697 0.2472 0.2267 0.1615 0.1164 0.1074 0.6232 0.8528 0.7284 0.5339 0.4581 0.3936 0.8444 0.7142 0.6050 0.5134 0.4363 0.3714 0.8360 0.7002 0.5874 0.4936 0.4155 0.3503 0.8277 0.6864 0.5703 0.4746 0.3957 0.3305 0.8195 0.6730 0.5537 0.4564 0.3769 0.3118 13% 14% 15% 16% 20% 24% 25% 30% 0.8850 0.8772 0.8696 0.8621 0.8333 0.8065 0.8000 0.7692 0.8264 0.8116 0.7972 0.7831 0.7695 0.7561 0.7432 0.6944 0.6504 0.6400 0.5917 0.7513 0.7312 0.7118 0.6931 0.6750 0.6575 0.6407 0.5787 0.5245 0.5120 0.4552 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718 0.5523 0.4823 0.4230 0.4096 0.3501 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972 0.4761 0.4019 0.3411 0.3277 0.2693 0.5268 0.4751 0.8963 0.8043 0.7224 0.6496 0.5847 0.4289 0.3875 0.3505 0.3173 0.2875 0.2607 0.2366 0.2149 0.1954 0.1346 0.0938 0.0859 0.0558 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 0.4440 0.3971 0.3555 0.3186 0.2858 0.2567 0.2307 0.2076 0.1869 0.1685 0.1122 0.0757 0.0687 0.0429 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 0.3262 0.2897 0.2575 0.2292 0.2042 0.1821 0.1625 0.1452 0.0935 0.0610 0.0550 0.0330 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.2992 0.1597 0.1413 0.1252 0.0779 0.0492 0.0440 0.0254 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 0.3624 0.3152 0.2745 0.1401 0.1229 0.1079 0.0649 0.0397 0.0352 0.0195 0.2633 0.2320 0.2046 0.1807 0.2394 0.2090 0.1827 0.1599 0.8114 0.6598 08034 0.6468 0.5375 0.4388 0.3589 0.2942 0.2415 0.1987 0.1637 0.5219 0.4220 0.3418 0.2775 0.2257 0.1839 0.1502 0.5067 0.4057 0.3256 0.2618 0.2109 0.1703 0.1378 0.4919 0.3901 0.3101 0.2470 0.1971 0.1577 0.1264 0.7798 0.6096 0.4776 0.3751 0.2953 0.2330 0.1842 0.1460 0.1160 0.7954 0.6342 0.7876 0.6217 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.3387 0.1229 0.1069 0.0930 0.0541 0.0320 0.0281 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.1252 0.1078 0.0929 0.0002 0.0451 0.0258 0.0225 0.2959 0.2502 02120 0.1799 0.1528 0.1300 0.1108 0.0946 0.0808 0.0691 0.0376 0.0208 0.0180 0.2765 0.2317 0.1945 0.1635 0.1377 0.1161 0.0981 0.0829 0.0703 0.0596 0.0313 0.0168 0.0144 0.2584 0.2145 0.1784 0.1486 0.1240 0.1037 0.0668 0.0728 0.0611 0.0514 0.0261 0.0135 0.0115 0.7419 0.5521 0.4120 0.3083 0.2314 0.1741 0.1314 0.0994 0.0754 0.7059 0.5000 0.3554 0.2534 0.1813 0.1301 0.0937 0.0676 0.0490 0.6989 0.4902 0.3450 0.2437 0.1727 0.1227 0.0875 0.0626 0.0449 0.6717 0.4529 0.3066 0.2083 0.1420 0.0972 0.0668 0.0460 0.0318 0.6060 0.3715 0.2281 0.1407 0.0872 0.0543 0.0213 0.0134 0.0339 0.1351 0.1117 0.0926 0.0768 0.0638 0.0531 0.1228 0.1007 0.0826 0.0680 0.0560 0.0462 0.1117 0.0907 0.0738 0.0601 0.0491 0.0402 0.1015 0.0817 0.0659 0.0532 0.0431 0.0349 0.0588 0.0471 0.0923 0.0736 0.0378 0.0304 0.2621 0.2072 0.2097 0.1594 0.1226 0.0943 0.0725 0.0443 0.0217 0.0109 0.0092 0.0382 0.0181 0.0088 0.0074 0.0329 0.0151 0.0071 0.0059 0.0284 0.0126 0.0057 0.0047 0.0245 0.0105 0.0046 0.0038 0.0573 0.0437 0.0334 0.0256 0.0196 0.0151 0.0116 0.0042 0.0016 0.0356 0.0259 0.0189 0.0139 0.0102 0.0075 0.0055 0.0017 0.0005 0.0323 0.0234 0.0169 0.0123 0.0089 0.0065 0.0048 0.0014 0.0221 0.0154 0.0107 0.0075 0.0053 0.0037 0.0026 0.0007 0.0085 0.0054 0.0035 0.0022 0.0014 0.0009 0.0006 . 0.0012 . . . . 0.0150 0.0116 0.0089 0.0068 0.0053 0.0040 0.0031 0.0024 0.0018 0.0014 .
Period 1 2 3 4 5 6 7 8 9 10 14 15 16 17 18 19 20 3.1473 11 10.368 9.7868 9.2526 8.7605 8.3064 7.8869 7.4987 7.1390 6.8052 6.4951 6.2065 5.9377 5.6869 5.4527 5.2337 5.0286 4.3271 3.7757 3.6564 12 11.255 10.575 9.9540 9.3851 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 6.4924 6.1944 5.4206 5.1971 4.4392 3.8514 3.7251 3.1903 13 12.134 11.348 10.635 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.7499 6.4235 5.5831 5.3423 4.5327 3.9124 3.7801 3.2233 13.004 12.106 11.296 10.563 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.9819 6.6282 5.7245 5.4675 4.6106 3.9616 3.8241 3.2487 13.865 12.849 11.938 11.118 10.380 9.7122 9.1079 8.5595 8.0607 7.6061 7.1909 6.8109 5.8474 5.5755 4.6755 4.0013 3.8503 3.2682 5.9176 5.6603 6.1218 5.8424 6.3025 6.0021 6.4624 6.1422 21 22 Table A-4 Present Value Interest Factors for a One-Dollar Annuity Discounted at k Percent for n Periods: PVIFA[1-1/(1+k)]/k 16% 20% 24% 25% 11% 12% 13% 14% 15% 0.9009 0.8929 0.8850 0.8772 0.8696 1.6901 0.8621 0.8333 0.8065 0.8000 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 30% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 09174 0.9091 0.7692 1.9704 1.9416 1.9135 1.8861 1.8594 1.8334 1.8000 1.7833 1.7591 1.7355 1.7125 1.6681 1.6467 1.6257 1.6052 1.5278 1.4568 1.4400 1.3609 2.9410 2.8839 2.8286 2.7751 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 2.4437 2.4018 2.3612 2.3216 2.2832 2.2459 2.1065 1.9813 1.9520 1.8161 3.6299 3.5460 3.4651 3.3872 3.3121 3.2397 3.1699 3.1024 3.0373 2.9745 4.4518 4.3295 4.2124 4.1002 3.9927 3.8897 3.7908 3.6959 3.6048 3.5172 2.9137 2.8550 2.7982 2.5887 2.4043 2.3616 2.1662 3.4331 3.3522 3.2743 2.9906 2.7454 2.6893 2.4356 30 35 3.9020 3.8077 3.7171 4.8534 4.7135 4.5797 36 40 50 5.7955 5.6014 5.4172 5.2421 4.4859 4.3553 4.2305 4.1114 3.9975 3.6847 5.0757 4.9173 4.7665 4.6229 3.8887 3.7845 3.3255 3.0205 2.9514 2.6427 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 5.3893 5.2064 5.0330 4.8684 4.7122 4.5638 4.4226 4.2883 4.1604 4.0386 3.6046 3.2423 3.1611 2.8021 7.6517 7.3255 7.0197 6.7327 6.4632 6.2098 5.9713 5.7466 5.5348 5.3349 5.1461 4.9676 4.7988 4.6389 4.4873 4.3436 3.8372 3.4212 3.3289 2.9247 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.5370 5.3282 5.1317 4.9464 4.7716 4.6065 4.0310 3.5655 3.4631 3.0190 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 5.8892 5.6502 5.4262 5.2161 5.0188 4.8332 4.1925 3.6819 3.5705 3.0915 14.718 13.578 12.561 11.652 10.838 10.106 9.4466 8.8514 8.3126 15.562 14.292 13.166 12.166 11.274 10.477 9.7632 16.398 14.992 13.754 12.659 11.690 10.828 17.226 15.678 14.324 13.134 12.085 11.158 18.046 16.351 14.877 13.590 12.462 11.470 18.857 19.660 20.456 18.292 17.011 17.658 23 16.444 24 21.243 18.914 16.936 22.023 19.523 25 17.413 15.415 15.937 7.8237 7.3792 6.9740 9.1216 8.5436 8.0216 7.5488 10.059 9.3719 8.7556 8.2014 10.336 9.6036 8.9501 8.3649 10.594 9.8181 9.1285 8.5136 14.029 12.821 11.764 14.451 13.163 12.042 14.857 13.489 12.303 15.247 13.799 12.550 11.469 10.529 9.7066 15.622 14.094 12.783 11.654 10.675 10.836 11.061 11.272 9.8226 10.017 9.2922 8.6487 8.0751 7.5620 7.1016 6.6870 6.3125 10.201 9.4424 8.7715 8.1757 7.6446 7.1695 6.7429 6.3587 10.371 9.5802 8.8832 8.2664 7.7184 7.2297 6.7921 6.3988 8.9847 8.3481 7.7843 7.2829 6.8351 6.4338 9.0770 8.4217 7.8431 7.3300 6.8729 6.4641 6.6039 6.2651 5.9542 7.1196 6.7291 6.3729 6.0472 7.7016 7.2497 6.8399 6.4674 6.1280 7.8393 7.3658 6.9380 6.5504 6.1982 7.9633 7.4694 7.0248 6.6231 6.2593 25.808 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.274 29.409 24.999 21.487 18.665 16.374 14.498 12.948 11.655 10.567 30.108 25.489 21.832 18.908 16.547 14.621 13.035 11.717 10.612 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 5.6685 4.7296 4.0333 3.8874 3.2832 5.7487 4.7746 4.0591 3.9099 3.2948 5.8178 4.8122 4.0799 3.9279 3.3037 5.8775 4.8435 4.0967 3.9424 3.3105 5.9288 4.8696 4.1103 3.9539 3.3158 5.9731 4.8913 4.1212 3.9631 3.3198 6.0113 4.9094 4.1300 3.9705 3.3230 6.0442 4.9245 4.1371 3.9764 3.3254 6.0726 4.9371 4.1428 3.9811 3.3272 6.0971 4.9476 4.1474 3.9849 3.3286 3.3321 9.4269 8.6938 8.0552 7.4957 7.0027 6.5660 6.1772 4.9789 4.1601 3.9950 9.6442 8.8552 8.1755 7.5856 7.0700 6.6166 6.2153 4.9915 4.1644 3.9984 3.3330 9.6765 8.8786 8.1924 7.5979 7.0790 6.6231 6.2201 4.9929 4.1649 3.9987 3.3331 9.7791 8.9511 8.2438 7.6344 7.1050 6.6418 6.2335 4.9966 4.1659 3.9995 9.9148 9.0417 8.3045 7.6752 7.1327 6.6605 6.2463 4.9995 4.1666 3.9999 3.3332 3.3333
Transcribed Image Text:Period 1 2 3 4 5 6 7 8 9 10 14 15 16 17 18 19 20 3.1473 11 10.368 9.7868 9.2526 8.7605 8.3064 7.8869 7.4987 7.1390 6.8052 6.4951 6.2065 5.9377 5.6869 5.4527 5.2337 5.0286 4.3271 3.7757 3.6564 12 11.255 10.575 9.9540 9.3851 8.8633 8.3838 7.9427 7.5361 7.1607 6.8137 6.4924 6.1944 5.4206 5.1971 4.4392 3.8514 3.7251 3.1903 13 12.134 11.348 10.635 9.9856 9.3936 8.8527 8.3577 7.9038 7.4869 7.1034 6.7499 6.4235 5.5831 5.3423 4.5327 3.9124 3.7801 3.2233 13.004 12.106 11.296 10.563 9.8986 9.2950 8.7455 8.2442 7.7862 7.3667 6.9819 6.6282 5.7245 5.4675 4.6106 3.9616 3.8241 3.2487 13.865 12.849 11.938 11.118 10.380 9.7122 9.1079 8.5595 8.0607 7.6061 7.1909 6.8109 5.8474 5.5755 4.6755 4.0013 3.8503 3.2682 5.9176 5.6603 6.1218 5.8424 6.3025 6.0021 6.4624 6.1422 21 22 Table A-4 Present Value Interest Factors for a One-Dollar Annuity Discounted at k Percent for n Periods: PVIFA[1-1/(1+k)]/k 16% 20% 24% 25% 11% 12% 13% 14% 15% 0.9009 0.8929 0.8850 0.8772 0.8696 1.6901 0.8621 0.8333 0.8065 0.8000 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 30% 0.9901 0.9804 0.9709 0.9615 0.9524 0.9434 0.9346 0.9259 09174 0.9091 0.7692 1.9704 1.9416 1.9135 1.8861 1.8594 1.8334 1.8000 1.7833 1.7591 1.7355 1.7125 1.6681 1.6467 1.6257 1.6052 1.5278 1.4568 1.4400 1.3609 2.9410 2.8839 2.8286 2.7751 2.7232 2.6730 2.6243 2.5771 2.5313 2.4869 2.4437 2.4018 2.3612 2.3216 2.2832 2.2459 2.1065 1.9813 1.9520 1.8161 3.6299 3.5460 3.4651 3.3872 3.3121 3.2397 3.1699 3.1024 3.0373 2.9745 4.4518 4.3295 4.2124 4.1002 3.9927 3.8897 3.7908 3.6959 3.6048 3.5172 2.9137 2.8550 2.7982 2.5887 2.4043 2.3616 2.1662 3.4331 3.3522 3.2743 2.9906 2.7454 2.6893 2.4356 30 35 3.9020 3.8077 3.7171 4.8534 4.7135 4.5797 36 40 50 5.7955 5.6014 5.4172 5.2421 4.4859 4.3553 4.2305 4.1114 3.9975 3.6847 5.0757 4.9173 4.7665 4.6229 3.8887 3.7845 3.3255 3.0205 2.9514 2.6427 6.7282 6.4720 6.2303 6.0021 5.7864 5.5824 5.3893 5.2064 5.0330 4.8684 4.7122 4.5638 4.4226 4.2883 4.1604 4.0386 3.6046 3.2423 3.1611 2.8021 7.6517 7.3255 7.0197 6.7327 6.4632 6.2098 5.9713 5.7466 5.5348 5.3349 5.1461 4.9676 4.7988 4.6389 4.4873 4.3436 3.8372 3.4212 3.3289 2.9247 8.5660 8.1622 7.7861 7.4353 7.1078 6.8017 6.5152 6.2469 5.9952 5.7590 5.5370 5.3282 5.1317 4.9464 4.7716 4.6065 4.0310 3.5655 3.4631 3.0190 9.4713 8.9826 8.5302 8.1109 7.7217 7.3601 7.0236 6.7101 6.4177 6.1446 5.8892 5.6502 5.4262 5.2161 5.0188 4.8332 4.1925 3.6819 3.5705 3.0915 14.718 13.578 12.561 11.652 10.838 10.106 9.4466 8.8514 8.3126 15.562 14.292 13.166 12.166 11.274 10.477 9.7632 16.398 14.992 13.754 12.659 11.690 10.828 17.226 15.678 14.324 13.134 12.085 11.158 18.046 16.351 14.877 13.590 12.462 11.470 18.857 19.660 20.456 18.292 17.011 17.658 23 16.444 24 21.243 18.914 16.936 22.023 19.523 25 17.413 15.415 15.937 7.8237 7.3792 6.9740 9.1216 8.5436 8.0216 7.5488 10.059 9.3719 8.7556 8.2014 10.336 9.6036 8.9501 8.3649 10.594 9.8181 9.1285 8.5136 14.029 12.821 11.764 14.451 13.163 12.042 14.857 13.489 12.303 15.247 13.799 12.550 11.469 10.529 9.7066 15.622 14.094 12.783 11.654 10.675 10.836 11.061 11.272 9.8226 10.017 9.2922 8.6487 8.0751 7.5620 7.1016 6.6870 6.3125 10.201 9.4424 8.7715 8.1757 7.6446 7.1695 6.7429 6.3587 10.371 9.5802 8.8832 8.2664 7.7184 7.2297 6.7921 6.3988 8.9847 8.3481 7.7843 7.2829 6.8351 6.4338 9.0770 8.4217 7.8431 7.3300 6.8729 6.4641 6.6039 6.2651 5.9542 7.1196 6.7291 6.3729 6.0472 7.7016 7.2497 6.8399 6.4674 6.1280 7.8393 7.3658 6.9380 6.5504 6.1982 7.9633 7.4694 7.0248 6.6231 6.2593 25.808 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.274 29.409 24.999 21.487 18.665 16.374 14.498 12.948 11.655 10.567 30.108 25.489 21.832 18.908 16.547 14.621 13.035 11.717 10.612 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 5.6685 4.7296 4.0333 3.8874 3.2832 5.7487 4.7746 4.0591 3.9099 3.2948 5.8178 4.8122 4.0799 3.9279 3.3037 5.8775 4.8435 4.0967 3.9424 3.3105 5.9288 4.8696 4.1103 3.9539 3.3158 5.9731 4.8913 4.1212 3.9631 3.3198 6.0113 4.9094 4.1300 3.9705 3.3230 6.0442 4.9245 4.1371 3.9764 3.3254 6.0726 4.9371 4.1428 3.9811 3.3272 6.0971 4.9476 4.1474 3.9849 3.3286 3.3321 9.4269 8.6938 8.0552 7.4957 7.0027 6.5660 6.1772 4.9789 4.1601 3.9950 9.6442 8.8552 8.1755 7.5856 7.0700 6.6166 6.2153 4.9915 4.1644 3.9984 3.3330 9.6765 8.8786 8.1924 7.5979 7.0790 6.6231 6.2201 4.9929 4.1649 3.9987 3.3331 9.7791 8.9511 8.2438 7.6344 7.1050 6.6418 6.2335 4.9966 4.1659 3.9995 9.9148 9.0417 8.3045 7.6752 7.1327 6.6605 6.2463 4.9995 4.1666 3.9999 3.3332 3.3333
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2. Using the Interpolation Method to calculate the YTM for the below Bonds: > The par value $18000 > Coupon Rate 10% every year > Maturity period 10 years > Market Value of bond $21800
Transcribed Image Text:2. Using the Interpolation Method to calculate the YTM for the below Bonds: > The par value $18000 > Coupon Rate 10% every year > Maturity period 10 years > Market Value of bond $21800
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