A Province of Ontario bond has 14 1 2 years remaining until it matures The bond pays $231 25 interest at the end of every six months At maturity, the bond repays its $5000 face value in addition to the final interest payment What is the fair market value of the bond, if similar provincial bonds are...

The bonds fair market value is the combined present value of the i ...

A Province of Ontario bond has 14 1/2 years remaining until it matures. The bond pays $231.25

Question:

A Province of Ontario bond has 14 1/2 years remaining until it matures. The bond pays $231.25 interest at the end of every six months. At maturity, the bond repays its $5000 in addition to the final interest payment. What is the fair market value of the bond, if similar provincial bonds are currently providing investors with a return of 7.8% compounded semiannually?
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...