Answer:
the present value of the bond is $16.67
Explanation:
given data
time NPER = 12 year = 12 × 2 = 24 semi annual
bond value FV = $1000
interest PMT = $50
rate of interest = 6% = [tex]\frac{0.06}{2}[/tex] = 0.03 = 3 % semi annual
solution
we will apply here formula for current value in excel as given below
-PV(Rate;NPER;PMT;FV;type) .............1
put here value as
rate = 3% and NPER = 24 , and FV = 1000 and PMT = $50
solve it we get
the present value of the bond is $16.67
