Additional Practice Problems with solutionsUsing the Tables_1-2

Additional Practice Problems with solutionsUsing the Tables_1-2

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Additional Practice Problems Using the Tables What price would you pay for the following bond? 10,000 face value, coupon rate of 16%, interest paid semiannually. The bond matures in ten years and the yield to maturity is 12% 10,000 x .312 = 3120 800 x 11.470 = 9176 12,296 What price would you pay for a zero coupon bond that matures in 6 years; 1,000 face value; 8% yield to maturity.= 1000 x
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Unformatted text preview: .630 = 630 You currently have a 20 year mortgage and have made payments for the last 5 years. The interest rate on the mortgage is 8% and interest payments are made annually. Your current annual payment is 12,325 per year. You want to refinance this mortgage as you can now get a rate of 6%. What is the amount that you are going to refinance? 12325 x 8.559 = 105,489.67...
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