am enclosing a copy of my spreadsheet below. For the coupon rate (100 * 10%) =100 For the Present Value =-PV(B8,B7,B6,B4) Particulars Values Face Value 1000 Coupon Rate 10% Coupon Payment 100 Number of years 15 Market Interest Rate 15% Present Value $707.63
Dear Bartleby, I was not able to verify the same answer that was calculated to the preceding question. What is the value of a 15-year 10% $1000.00 coupon bond when the market interest rate is 15%
The answer given was 708; however, when I did the calculations in excel, I came up with 707.63
I would appreciate it if you would recheck the answer given, in addition to a detailed explanation.
I am enclosing a copy of my spreadsheet below. For the coupon rate (100 * 10%) =100
For the
| Particulars | Values |
| Face Value | 1000 |
| Coupon Rate | 10% |
| Coupon Payment | 100 |
| Number of years | 15 |
| Market Interest Rate | 15% |
| Present Value | $707.63 |
In the given case, as calculated, Present value of the bond is $707.63
In Mcq, answer is rounded off to the next number
if the points number is greater than 0.5, then it is rounded off to next number
In the given case, Present value of bond is 707.63. here Decimal value is 0.63 which is greater than 0.5. So it is rounded off to next number i,e 708
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