A 1000 par value bond with 5 years remaining until maturity


1. A $1000 PAR value bond with 5 years remaining until maturity and an annual coupon rate of 7% is selling today to yield 8%. What is the current price of the bond?

2. Assume that you plan to buy a condo 5 years from now and you need to save for a down payment. You plan to save $2,500 per year, and you will deposit the funds in a bank account that pays 4% interest. How much will you have after 5 years? How much will you have if you make the deposits at the end of each year?

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Financial Management: A 1000 par value bond with 5 years remaining until maturity
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