Engineering Board Exam Reviewer · Bonds · medium
A P100,000 bond pays a 6% annual coupon and is redeemable at P110,000 at the end of 6 years. Find its price to yield 8%.
- P90,754.24
- P110,000
- P97,055.94
- P99,829.66
Answer
C. P97,055.94
Solution
Price =6,000(P/A,8%,6)+110,000(P/F,8%,6)=6,000(4.6229)+110,000(0.630170)=P97,055.94.
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