Question

what will be the price of bond with face value rs 1000 carrying a coupon of 10% maturing in 3 years at 10% premium on par value?

Answer 1

Answer:

Explanation:

What will be the price of bond with face value Rs 1000 carrying a coupon of I 0% maturing in 3 years at I 0% premium on par value? Present value factor and PVAF at 10% for 3 years is . 7513 and 2.4869 respectively .

Answer 2

In this question, we are asked to tell what the price of the bond will be.

• Using the formula for calculating the PVIF, the calculation would be $10,000 / (1 +. 05) ^ 5.
• The resulting PVIF figure from the calculation is "$7,835.26".
• The present value of the future sum is then determined by subtracting the PVIF figure from the total future sum to be received.
• The right answer is"$7,835.26".
• A formula called the present value interest factor (PVIF) is used to calculate the current value of a sum of money that will be received at a later time.
• PVIFs are frequently shown as tables that contain values for various periods and interest rate combinations.

CORRECT QUESTION-

What will be the price of a bond with a face value of Rs 1000 carrying a coupon of I 0% maturing in 3 years at I 0% premium on par value? The present value factor and PVAF at 10% for 3 years are .7513 and 2.4869 respectively.

826.43

7835.26

1075.12

1000

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