Assuming interest rates are 5% for AAA Rated Corporate bonds, calculate the value of your bond relative to this interest rate using equation . Assume that i = 5%. Is your bond selling for a premium or at a discount based on your calculation? What other factors can impact bond valuation?

I chose Apple Bond

Price = (coupon)*(1 - [1/ (1 + r)] )+( par value )

R(1 + r)

Where:

P₀ = current price of bond

I_t = annual interest (coupon)

PVn = par value at maturity

n = # years to maturity

i = prevailing market yield (required return)