Suppose a friend of yours invested in an outstanding bond with Purple Pottery. The bond has an annual coupon rate of $9\%,$ a remaining maturity of $14$ years, and a $$1,000$ par value. The market interest rate is currently $11\%.$

In order to use a financial calculator to compute how much your friend paid for the bond, you will need to know the following information:

I$/$Y

I$/$Y

: the market rate of the interest on the bond

N

N

: the number of years before the bond matures

PMT

PMT

: dollars of interest paid each year

FV

FV

: the par, or maturity, value of the bond

Compute the amount of interest paid each year by completing the following math derivation. Select this same value from the $$PMT$$ drop down menu found in the following financial calculator table.

Amount of Interest

Amount of Interest

$=$

$=$

Coupon Rate

Coupon Rate

$\backslash$times

$\backslash$times

Par Value

Par Value

$=$

$=$

$\backslash$times

$\backslash$times

$=$

$=$