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# An investor is considering buying a 20 year corporate bond The bond

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An investor is considering buying a 20-year corporate
bond. The bond has a face value of \$1,000 and pays 6%
interest per year in two semiannual payments. To receive
8% interest, compounded semiannually, how much should
be paid for the bond?
Solution
Hi,
Price of the bond = 30*(1-(1+8%/2)^(-
40))/(8%/2)+1000/(1+8%/2)^(40)
=\$802.07
Hence, the price that should be paid is \$802.07

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An investor is considering buying a 20 -year corporate bond. The bond has a face value of \$1,000 and pays 6% interest per year in two semiannual payments. To receive 8% interest, compounded semiannually, how much should be paid for the bond? Solution Hi, Please find the correct answers as follows: ...
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Anonymous
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