Bonds Problems

Bond Valuation Problems: (Use 6 decimal places for PV factors)

1. Z entered in a 10-year bond with a face value of 100 shares with Php1,100 par value with a

coupon rate of 8% annually and effective interest rate of 10% annually. What is the carrying

value of the bond at investment period?

2. Y entered in an 8-year bond with a face value of 60 shares with Php2,000 par value with a

coupon rate of 9% annually and effective interest rate of 8% annually. What is the carrying value

of the bond at investment period?

3. X entered in a 5-year bond with a face value of 50 shares with Php1,500 par value with a coupon

rate of 10% annually and effective interest rate of 11% annually. What is the carrying value of

the bond at investment period?

4. W entered in a 10-year bond with a face value of 60 shares with Php1,200 par value with a

coupon rate of 9% annually and effective interest rate of 11% annually. Interest is paid semi-

annually. What is the carrying value of the bond at investment period?

5. V entered in a 5-year bond with a face value of 500 shares with Php1,000 par value, that will be

paid in equal annual installment until maturity, with a coupon rate of 8% annually and effective

interest rate of 6% annually. What is the carrying value of the bond at investment period?

6. U entered in a 5-year bond with a face value of 100 shares with Php1,200 par value and the

carrying value of the bond at investment period is Php118,225 with a coupon rate of 9%

annually. What is the effective interest rate of the bond?

7. T entered in a 5-year bond with a face value of 50 shares with Php1,000 par value, that will be

paid in equal annual installment until maturity, with a coupon rate of 8% annually and effective

interest rate of 10% annually. Interest is paid semi-annually. What is the carrying value of the

bond at investment period?