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29 September, 21:06

A 2000 11% ten-year bond has semiannual coupons and is sold to yield 5.2% covertible semiannually. the discount on the bond is $83.28. find the redemption amount

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  1. 29 September, 21:08
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    Answer:. The redemption amount is 4438.18

    Explanation:

    Given:

    F = 2000,

    r = 5.5%,

    Fr = 110,

    j = 2.6%, 20 payments.

    Then,

    P=C-83.28 P = 110a20|2.6%+C (1 + 2.6%) - 20, then,

    C = 4438.18.

    Therefore,

    The redemption amount is 4438.18
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