Bond A has the following terms: Interest Factors for the Present Value of One Dollar Interest Factors for the Present Value of an Annuity of One Dollar Coupon rate of interest (paid annually): 12 percent Principal: $1,000 Term to maturity: Seven years Bond B has the following terms: Time Period (e.g. year) 1 2 3 4 5 1% .990 980 971 .961 .951 2% 980 1961 .942 .924 906 3% 971 1943 915 .889 .863 4% 1962 925 .889 .855 .822 5% 952 .907 .864 .823 .784 6% .943 .890 .840 .792 .747 7% 935 .873 .816 .763 .713 8% .926 .857 .794 .735 .681 9% 917 .842 .772 .708 .650 10% .909 .826 .751 .683 .621 12% .893 .797 .712 .636 .567 14% .877 .769 .675 .592 .519 15% .870 .756 .658 572 497 16% .862 .743 .641 .552 476 18% .847 .718 .609 .516 437 20% .833 .694 .579 482 402 24% .806 .650 524 423 .341 28% .781 .610 -477 373 291 Time Period (e.g. year) 1 2 3 4 1% 2% 3% 4% 5% 6% 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 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.605 1.566 1.528 1.457 1.392 1.332 1.276 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.246 2.174 2.106 1.981 1.868 1.766 1.674 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1.966 4.853 4.713 4.580 4.452 4.329 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 5 942 Coupon rate of interest (paid annually): 6 percent Principal: $1,000 Term to maturity: Seven years a. What should be the price of each bond if interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar. Price of bond A: $ Price of bond B: $ b. What will be the price of each bond if, after three years have elapsed, interest rate is 12 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar. Price of bond A: $ Price of bond B: $ c. What will be the price of each bond if, after seven years have elapsed, interest rate is 11 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar. Price of bond A: $ Price of bond B: $ 6 7 8 9 10 933 .923 914 905 .888 .871 .853 .837 .820 .838 .813 .789 .766 .744 .790 .760 .731 .703 .676 .746 .711 .677 .645 .614 .705 .665 .627 592 .558 .666 .623 582 .544 508 .630 .583 540 500 .463 596 547 502 460 .422 564 513 467 424 386 .507 452 404 361 .322 .456 400 351 .308 .270 .432 .376 .327 .284 .247 410 .354 .305 .263 .227 .370 314 .266 .226 .191 .335 .279 .233 .194 .162 .275 .222 .179 .144 .116 .227 .178 .139 . 108 .085 6 7 8 9 10 5.795 5.601 5.417 5.242 5.076 4.917 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 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 2.678 2.455 7.652 7.325 7.020 6.733 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 2.540 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.985 5.759 5.328 4.946 4.607 4.303 4.031 3.566 3.184 2.868 2.603 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 2.930 2.650 11 12 13 14 15 .896 .887 .879 .870 .861 .804 .788 .773 .758 .743 .722 .701 .681 .661 642 .650 .625 .601 .577 555 .585 .557 .530 505 481 .527 497 469 442 .417 475 .444 415 388 .362 429 397 .368 .340 .315 .388 356 326 .299 .275 .350 319 .290 .263 .239 .287 .257 .229 .205 .183 .237 .208 182 .160 .140 .215 .187 .163 .141 .123 .195 .168 .145 .125 .108 .162 .137 .116 .099 .084 .135 .112 .093 .078 .065 .094 .076 .061 .049 .040 .066 .052 .040 .032 .025 11 12 13 14 15 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2.978 2.683 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7.487 7.103 6.424 5.842 5.342 4.910 4.533 3.912 3.427 3.040 2.727 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 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 17 18 19 20 .853 .844 .836 .828 .820 .728 .714 .700 .686 .673 .623 .605 .587 .570 .554 .534 .513 494 475 456 458 436 416 396 377 .394 .371 350 .331 312 339 317 .296 .276 .258 292 .270 .250 .232 .215 .252 .231 .212 .194 .178 .218 .198 .180 .164 .149 .163 .146 .130 .116 .104 .123 .108 .095 .083 .073 .107 .093 .081 .070 .061 .093 .080 .069 .060 .051 .071 .060 .051 .043 .037 .054 .045 .038 .031 .026 .032 .026 021 .017 .014 .019 .015 .012 .009 .007 16 17 18 19 20 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 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 4.080 3.529 3.104 2.767 17.226 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 4.097 3.539 3.109 2.770 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 .780 .610 .478 375 .295 .233 .184 .146 116 .092 .059 .038 .030 .024 .016 .010 .005 .002 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3.122 2.776 30 .742 .552 412 308 .231 .174 .131 .099 .075 .057 .033 .020 2015 .012 .007 .004 .002 .001 30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.177 5.517 4.979 4.160 3.569 3.124 2.778