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angielynabano
Jan 6, 2011, 01:05 AM
par value = 1000
coupon rate = 10%
maturity = 25 years
interest rate - 10%

*required
1.how much is the expected annual interest?
2. how much is the interest every 6 months?
3. how much is the expected par value at the end of 25years?

manik chand dey
Jan 6, 2011, 02:06 AM
par value = 1000
coupon rate = 10%
maturity = 25 years
interest rate - 10%

*required
1.how much is the expected annual interest?
2. how much is the interest every 6 months?
3. how much is the expected par value at the end of 25years?

1.expected annual interest is the coupon multiplied by the par value. i.e,10% on 1000, which is 100.
2. you will get interest of 50 each for 50 times, if interest is paid every 6 months.
3. expected par value you will get 1000.