Question

A 40-year bond is purchased at a discount. The bond pays annual coupons. The amount for accumulation of discount in the 15th coupon is 194.82. The amount for accumulation of discount in the 20th coupon is 306.69. Calculate the amount of discount in the purchase price of this bond.

Answer 1

Throughout the clarification segment elsewhere here, the definition of the query has been mentioned.

Step-by-step explanation:

• Just like I comprehend it, the discount accumulation rate seems to be the growth throughout the bond's fair market value since it gets closer to maturity.
• Therefore the $194.82 again for the 15th coupon seems to be the book value charged by the 15th coupon at just the conclusion of every year less the book value charged either by the 15th coupon at either the starting of each year.

This would be like

⇒
`Book \ value* Yield \ rate- Coupon \ payout \ at \ either \ the \ starting \ of \ every \ year.`