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On Jan. 1, 2018, your cousin, Laura, purchased one $1,000, 5-year semiannual bond with a coupon rate of 8%. The yield of the bond was 8% at the time. How much did Laura pay for the bond?

Respuesta :

Answer:

the amount pay for the bond is $1,000

Explanation:

The computation of the amount pay for the bond is shown below:

Given that

Future value be $1,000

NPER is 5 × 2 = 10

RATE = 8% ÷ 2 = 4%

PMT = $1,000 × 8% ÷ 2 = $40

The formula is given below:

=-PV(RATE,NPER,PMT,FV,TYPE)

After applying the above formula, the present value is $1,000

Hence, the amount pay for the bond is $1,000

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