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A $3,700 bond pays interest at 3% compounded semi-annually. The bond is redeemable in 1 year 6 months, and is purchased to yield 4%.


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A $3,700 bond pays interest at 3% compounded semi-annually. The bond is redeemable in 1 year 6 months, and is purchased to yield 4%. 1. Find the purchase price of the bond. 2. Calculate the premium or discount. 3. Construct the appropriate bond schedule, including the totals for Bond Interest, Interest on Book Value at Yield, and Premium Amortized or Discount Accumulated. Paragraph 1. Find the purchase price of the bond. PMT Setting N BI U

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To find the purchase price of the bond we need to calculate the present value of the bonds future cash flows using the given information 1 Find the pu... blur-text-image

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