Question

A single bond with a face value of $1,000 has a stated annual interest rate of 7.6%. The last bond traded on this day was 98.45%. Determine the cost of bond at closing.

Answer 1

$984.50

Step-by-step explanation:

Cost of bond at closing = Par value * % Bond traded last

Cost of bond at closing = 1000 * 98.45%

Cost of bond at closing = $984.50

Thus, the cost of bond at closing is $984.50