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McAllister Inc sold a 5 year bond 3 years ago with a $70 coupon at par. If the

current interest rate demanded by the market is 0.16, what is the present value of the bond today? The bond has a par value of $1,000. 

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new doc 2019-08-05 11.20.47_2.jpg

Present value of Bond = Coupon
when 2 -
infurst rate - 0'lb
no. of years - 3
Goupon = FD
to . 1! )
The above formula for when maturity is #pending
But in your case it is sold already 3 years...

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