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Interest Rates and Bonds Consider a coupon bond with the following information: maturity: 8 years face value: 1000 current price: 800 coupon rate: 5%, and
Interest Rates and Bonds
Consider a coupon bond with the following information: maturity: 8 years face value: 1000 current price: 800 coupon rate: 5%, and coupon is paid at end of every year. Work out the interest rate from this coupon bond by the numerical iteration in Excel. You need to show the last five steps of your attempted answers and corresponding NPVs. Any solution gives the NPV less than 0.01 (in absolute value) can be accepted. (Please conduct the calculation in Excel and copy the final table here.)
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