Calculate the current price of a bond that pays semi-annual coupon payments and has the following characteristics:

Question:

(a) NPER—15,

(b) Coupon Payments--$73, and

(c) Market Rate of Interest—13%.the market rate. Using Excel's PV() function:RATE6.50% (This is the semi-annual required rate of return or YTM.) NPER15 (This is the number of semi-annual periods to maturity.) MT($73.00) (This is the semi-annual coupon interest payment.)FV($1,000.00) (This is the par or face value of the bond .)TYPE0(Input 0 or 1. 0 or blank means ordinary annuity. 1 means annuity due.)PV$1,075.22 (Type formula here: = PV(rate, nper, pmt, fv, type)

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... 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...