Compute the price of bonds based on semiannual intrest


Problem:

Olsons Clothing Store. The 1,000 par value bonds have quoted annual intrest rate of 13% which is explained semiannually The yield to maturity on the bond is 12% annual intrest. There are 20 years to maturity.

Required:

Question 1: Compute the price of bonds based on semiannual intrest payments.

Question 2: With 15 years maturity if yield to maturity goes down to 10% what will be the new price of the bond?

Note: Please show guided help with steps and answer.

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Accounting Basics: Compute the price of bonds based on semiannual intrest
Reference No:- TGS0889862

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