Guys, i have a an urgent question to answer, this is the question:
A bond with a face value of $1,900 pays half-yearly interest at a rate of 6% pa compounded half-yearly and has 12 years until maturity. The next interest payment is due in exactly one half-year. Calculate the price (P) required to yield 4% pa compounded half-yearly. Give your answer in dollars and cents to the nearest cent.
i have been trying to figure out the answer and how to go about doing it... this is my answer:
PV=C/i [1-1/(1+i)n]+Par value/(1+i)n
=57/0.02[1-1/(1.02)24]+1900/(1.02)24
=2,850[0.378278512]+1181.270827
=2259.364586
Can anyone verify it? Thanks!