The interest rate is 5% per half-year. Be my guest if you want to add 40 terms.
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The interest rate is 5% per half-year. Be my guest if you want to add 40 terms. I prefer the annuity method.
The coupons are worth
The final payment is worth PV(Principal Repayment) = $100, 000 (1.05)40 ≈ $14,204.57. Therefore, the bond is worth about $39,943.20 today.
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