Appendix B

Appendix D

Interest Factors for the Present Value of One Dollar 24% 28% WN 8 Interest Factors for the Present Value of an Annuity of One Dollar Time Period 25 6% year) 1 2 3 4 5 1% 3% 5% 7% 8% 9% 10% 12% 14% 16% 18% 20% 24% 28% 32% 36% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0.735 1970 1942 1913 1.886 1.859 1.833 1.808 1.783 1759 1.736 1.690 1.647 1.605 1.566 1.528 1.457 1.392 1.332 1.276 2.9412.884 2829 2.775 2.723 2673 2.624 2.577 2531 2.487 2.402 2.322 2.246 2.174 2.106 1.981 1.868 1.766 1674 3902 3.808 3.717 3,630 3.546 3.465 3,387 3.312 3.240 3.1703037 2.914 2.798 2690 2.589 2.404 2.241 2.096 1.966 4.853 4713 4.580 4.452 4329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.274 3.127 2.991 2.745 2.532 2.345 2.181 6 5.795 5.601 5.417 5.242 5.076 4917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3.326 3.020 2.759 2.534 2.399 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.039 3.812 3.605 3.242 2.937 2678 2455 8 76527325 7.020 6733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2540 9 8566 8.162 2786 7435 2108 6.802 6.515 6.247 5985 5.759 5328 4946 4,607 4.303 4.031 3.566 3.184 2868 2603 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2930 2.650 11 10.368 9.787 9.253 8.760 8.306 7.8877,499 7139 6.805 6.495 5.988 453 5.029 4.656 4327 3.776 3.335 2978 2.683 12 11.255 10575 9.954 9.385 8.863 8.384 7943 7536 7161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2708 13 12.134 11.348 10,635 9.986 9.394 8.534 8.358 7904 7487 7.103 6.424 5.842 5342 4.910 4.533 3.912 3.427 3.040 2.727 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.008 4,611 3.962 3.459 3,061 2.740 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8,060 7.606 6,811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7824 6.974 6.265 5.669 5.162 4.730 4.003 3,503 3.088 2.758 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 18 16.398 14.992 13.754 12.659 11.690 10,828 10.059 9.372 8.756 8.2017.250 6.467 5.818 5.273 4.812 4080 3.529 3.104 2767 1917.226 15,678 14 324 13.134 12.085 11,158 10,336 9.604 8.950 8.365 7.366 6.550 5,877 5.316 4.844 4.0973.539 3.109 2.770 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.023 19.523 17413 15.622 14.094 22.782 11.654 10.675 9.822 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3,122 2.776 30 2590822.937 19.600 17292 15.373 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.177 5517 4.979 4.160 3.569 3,124 2.778 Problem 13-02 a. A $1,000 bond has a 6.5 percent coupon and matures after ten years. If current interest rates are 10 percent, what should be the price of the bond? Assume that the bond pays Interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $ b. 1 after five years Interest rates are still 10 percent, what should be the price of the bond? Use Appendix B and Appendix D to answer the question. Assume that the bond pays Interest annually. Round your answer to the nearest dollar $ c. Even though Interest rates did not change in a and b, why did the price of the bond change? The price of the bond with the longer term is -Select-than the price of the bond with the shorter term as the investors will collect the "Select- interest payments and receive the principal within a longer period of time. d. Change the Interest rate in a and b to 6 percent and rework your answers. Assume that the bond pays Interest annually. Round your answers to the nearest dollar Price of the bond (ten years to maturity): $ Price of the band (five years to maturity): $ Even though the interest rate is o percent in both calculations, why are the bond prices different? The price of the bond with the longer term is-Select-than the price of the bond with the shorter term as the investors will collect the "Select Interest payments for a longer period of time