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otter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 8.8%, what is the value of the bond

Respuesta :

Answer:

the present value is $818.71

Explanation:

The computation of the value of the bond is shown below:

Given that

RATE = 8.8%

NPER = 10

PMT = $1,000 × 6% = $60

FV = $1,000

The formula is given below:

= -PV(RATE;NPER;PMT;FV;TYPE)

After applying the above formula, the present value is $818.71

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