Assuming that the current interest rate is 3 percent, compute the present value of a five year, 5 percent coupon bond with a face value of $1,000 What happens when the interest rate goes to 4 percent What happens when the interest rate goes to 2 percent ...

Present Value for 5year 5 percent coupon bond with ...

Assuming that the current interest rate is 3 percent, compute the present value of a five-year, 5

Question:

Assuming that the current interest rate is 3 percent, compute the present value of a five-year, 5 percent bond with a of $1,000. What happens when the interest rate goes to 4 percent? What happens when the interest rate goes to 2 percent?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... 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...