Question

Joaquim Alvez purchases 32 bonds that mature in 2024 at 96.7.

They have a coupon rate of 8.625%.

Find the total cost if commissions are $10 per bond.

Answer 1

total par value = 32 bonds x $96.7
=$3094.4
total bond value= par vaue + total interest
total bond value = par value(1+ni)
n = 2024-2017
= 7
i = 8.625%
total bond value = $4692.64
total cost = total bond value - commissions
total cost = $4692.64-(32 x $10)
= $4642.64
Joaquim Alvez will have a total cost of $4642.64.