A $16,000, 6
Subject:FinancePrice:2.86 Bought4
A $16,000, 6.5% bond redeemable at par is purchased 6 years betore maturity to yield 5.9% compounded semi—annually. It the bond interest is payable semi—annually, what is the purchase price of the bond? The purchase mice of the bond is $ . (Round the ?nal answer to the nearest cent as needed. Round all intermediate values to six decrmal places as needed.)
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Calculation of Purchase price of bond
= (Interest semi-annually × P..F@2.95% for 12 periods) + (Maturity value × P..F@2.95% for 12th period)
= (520 × 9.983779) + (16000 × 0.705479)
= $16,479.22908
