Question

You purchase a bond with an clean price of $1,129. The bond has a coupon rate of 10 percent, and there are 4 months to the next semiannual coupon date. What is the dirty price of the bond

Answer 1

The answer is "1145.66".

Step-by-step explanation:

Using formula:

`\text{Dirty price = Clean price + accrued interest}\\\\`

`= 1,129 +100* 0.5* (2)/(6) \\\\= 1,129 +50* (2)/(6) \\\\= 1,129 + (100)/(6) \\\\= (6774+100)/(6) \\\\= (6874)/(6) \\\\=1145.66`

OR

`=\$1,129+(10\% \ of\ 1000)* (2)/(12)\\\\=\$1,129+((10)/(100) * \ 1000)* (2)/(12)\\\\=\$1,129+(100)* (2)/(12)\\\\=\$1,129+ (200)/(12)\\\\=\$1,129+ 16.666667\\\\=\$1,145.666667\\\\`