IF function: Allows you to test a condition and return a specific value is the result is true and different value if the result is false. The of the IF function is "=IF(test_condition,value_if_true,value_if_false)" and specific considerations need to be made when using this fur The test_condition argument is an evaluation of the status of a cell, such as if the value of a cell is greater than, less than or equal to number or cell. The value_if_true and value_if_false arguments will return any specific result for each option, such as another cell re a value, or text. Throughout the entire equation, if text is being used in the test_condition, value_if_true, or value_if_false arguments the text itself should be entered in quotations so that Excel will recognize the text as a "string of text Instead of another function. Fro Excel Simulation below, if in a blank cell "=IF(C6>2,"Long-Term Bond","Short-Term Bond") was entered, the formula would output the the value_if_true since the test_condition would be result as true, or in this case the text "Long-Term Bond. Excel processes the IF fi by separating it out into separate parts. First the test_condition - Excel thinks, find cell C6 and determine if the value is greater than Once Excel determines if the result of that test_condition is TRUE or FALSE, it will return the value_if_true or value_if_false. PV Function: Allows you to perform the mathematical present value calculation of a value. The syntax of the PV function is "=PV(rate,nper,pmt, [fv].[type)" and results in the total amount that a series of future payments is worth now also known as the present The rate argument is the interest rate per period. The nper argument is the total number of payment periods. The pit argument is ti payment made each period that does not change over the life of the investment and this argument must be included if the [fv] argum not included. The [fv] argument is the future value, or the cash basis to attain after the last payment is made and this argument must Included if the pit argument is omitted. The [type] argument is a logical value of 0 or 1, which indicates when the payments are due is the payment at the beginning of the period and O, is the payment at the end of the period. Both the [fv] and [type] values are optio arguments to have the formula work, which is why they are surrounded by brackets in the syntax, however, these values would not b entered with brackets in the actual function. For the purposes of this Excel Simulation, please include the /omtand [fv/ arguments, bi out the [typeargument from the function. Also, the [pmtand [IV] arguments should also be entered as negative values. 15 Bond Pricing - Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Sign In X Calibri M Paste | HA % A Alignment Number Conditional Format as Cell Formatting Table Styles U- Cells Editing Clipboard 5 Font Styles A1 f The Chestnut Street Company plans to issue $825,000, 10-year bonds that pay 7 F G H 1 B D E The Chestnut Street Company plans to issue $825,000, 10-year bonds that pay 7 percent semiannually on March 31st and September 30th. 5 Information relating to this bond is found below: Face Value: $ 825,000 Number of Years: 10 Stated Interest Rate: 7% 3 Number of Payments per Year: 2 Required: 1 Calculate or provide the information requested using a formula or cell reference unless 2 you are instructed to use a specific function: 3 4 1) Assume the Market Interest Rate is: 8% 5 6 a. How many total payments or periods will this bond pay interest? 7 8 9 b. Calculate the amount of interest that will be paid on March 31st. 0 1 c. Calculate the selling price of this bond using the PV Function 2 3 d. Use the IF function to show the balance in the Premium or Discount Sheet1 + READY u 100% Hint Attempt(s) B D E F G H 14 1) Assume the Market Interest Rate is: 8% 15 16 a. How many total payments or periods will this bond pay interest? 17 18 19 b. 20 Calculate the amount of interest that will be paid on March 31st. DONE 21 c. 22 Calculate the selling price of this bond using the PV Function 23 d. 24 Use the IF function to show the balance in the Premium or Discount account at the time the bond is issued based on the selling price you calculated in letter c. 25 26 27 28 2) Assume the Market Interest Rate is: 6% 29 30 a. Calculate the amount of interest that will be paid on March 31st. 31 32 b. Calculate the selling price of this bond using the PV Function 33 34 c. 35 Use the IF function to show the balance in the Premium or Discount account at the time the bond is issued based on the selling price you calculated in letter c. 36 37 Sheet1