FIN630 assignment Solution

Formula for the soloution of the assignment

P= i(pvifa)kd,n + M(pvif)kd,n

i=coupon rate =10%=1000*10/100=100

M face value or par value= 1000

Kd= 10%= 10/2=n 5% because we have to compute on the semiannually

N= 5year 5*2- 10 year

Coupon rate I = 10% of 1000= 100

M face value= 1000

Putting the value in the formula

P= 100(7.7217) + 1000(.6139)

The answer will be given below

772.1700  +  613.900  = 1386 answer