Problem 16-04 A $1,000 bond has a 4 percent coupon and currently sells for $840. The bond matures after ten years. What is the bond's anticipated yield? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest whole number. % Interest Factors for the Present Value of One Dollar Time Period (e.g. year) 1% 29 3% 49% 59. 5% 7% 12% 149 15% 16% 18% 20% 24% 28% UAWN 990 980 971 961 951 980 961 942 924 906 971 943 915 889 .863 .962 925 889 855 822 952 907 864 .823 784 943 890 840 .792 .747 935 873 816 1763 .713 8% 926 .857 794 .735 681 1917 842 1772 1.708 1650 10% .909 .826 .751 3683 621 .893 797 712 .636 567 .877 769 1675 1592 519 870 1756 .658 .572 .497 .862 1743 .641 1552 476 .847 718 .609 .516 .437 .833 694 579 .482 402 806 -650 524 423 .341 781 610 477 373 291 5 0 VO 6 7 8 9 10 942 933 923 914 905 .888 .871 .853 837 838 813 789 .766 .744 790 760 731 .703 .676 746 .711 .677 .645 1614 .705 665 .627 .592 558 .666 .623 582 544 .508 .630 583 .540 .500 463 596 547 -502 460 1422 564 513 467 424 386 .507 452 404 .361 :322 456 400 351 308 270 .432 376 327 284 247 410 354 1305 .263 227 370 314 .266 .226 .191 335 .279 .233 .194 .162 275 222 .179 144 .116 227 178 .139 108 085 820 11 12 13 14 15 896 887 879 .870 861 .804 788 773 758 .743 .722 .701 .681 661 1642 650 .625 1601 577 555 -585 557 530 505 481 .527 497 469 442 417 475 .444 415 388 362 429 397 368 340 315 388 1356 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 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 1396 377 .394 .371 .350 331 1312 339 317 296 276 258 .292 1270 .250 232 215 .252 1231 .212 194 .178 218 .198 180 164 149 .763 146 .130 .116 .104 123 3108 095 083 073 1107 093 081 .070 .061 093 .080 .069 .060 051 .071 .054 060 045 .051 038 043 031 .037 026 .032 026 .021 .017 .014 019 015 012 009 .007 780 25 .610 .478 375 1295 233 184 .146 116 092 059 .038 .030 .024 002 .016 010 .005 30 742 552 .308 .412 174 231 131 099 075 057 033 020 001 015 012 2007 .004 .002 Interest Factors for the Present Value of an Annuity of One Dollar Time Period year) 1 2 3 4 5 19 29 3% 49 6% 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 1981 1.868 1.766 1.674 3902 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 1966 4.853 4713 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 6 Vo 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 12 13 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 15 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 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 1:30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9,427 8.055 2003 6.177 5.517 4.979 4.160 3.569 3.124 2.778