Bonds maturity and Interest

ivory5130 · #1 Jan 29, 2007, 12:35 PM

I can't figure this out, please help.

My company has two bond issues outstanding. Both bonds pay 100 annual interest plus 1000 at maturity. Bond x has a maturity of 15 years, and Bond Y a maturity of 1 year. What will the value of each of these bonds when the going rate of interest is 5%, 8%, and 12%? Assume that there is only one more interest payment to be made on bond y.

ivory5130 · Jan 30, 2007, 08:38 PM

Quote:

Originally Posted by ivory5130

I can't figure this out, please help.

My company has two bond issues outstanding. Both bonds pay 100 annual interest plus 1000 at maturity. Bond x has a maturity of 15 years, and Bond Y a maturity of 1 year. What will the value of each of these bonds when the going rate of interest is 5%, 8%, and 12%? Assume that there is only one more interest payment to be made on bond y.

I guess nobody else understands this either. My entire class is lost and our text is no help at all. Does anyone know of any online help guides that could maybe help me with this question? I seriously need some advice. I only have three weeks in the class left. I just found out that we were supposed to have taken accounting before taking financial management but it's too late now. Help please.



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