Business & Finance Question

Anonymous
timer Asked: Nov 15th, 2016

Question description

1) A bond has a face value of $1000 and a contractual interest rate of 5%. The bond has quarterly interest payments. The market interest rate is 4%. The bond matures in 5 years and will pay $1000. What is the bond's current market price?

2) An annuity has an interest rate of 7% and makes a quarterly payment of $2000. The annuity is to last for 5 years. What is the present value of the annuity.

Need help figuring these two questions and and how and what formula was used to get the end result.

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