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Arts and Crafts Warehouse wants to issue 15-year, zero-coupon bonds that yield 7.5 percent. What price should it charge for these bonds if the face value is $1,000? Assume semiannual compounding.
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Arts and Crafts Warehouse wants to issue 15-year, zero-coupon bonds that yield 7.5 percent. What price should it charge for these bonds if the face value is $1,000? Assume semiannual compounding.

User Dontae
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PV=(1,000)/(1+(.075)/(2)^(2*15) ) =331.40

They should charge $331.40 for these bonds if the face value is $1,000.

User Ryan Berger
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