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A Bond Pays $1000 Interest at the End of Every

Question 44

Short Answer

A bond pays $1000 interest at the end of every year for the next 30 years. What is the current economic value of each of the 15th and 30th payments if we discount the payments at:
a) 5% compounded semiannually?
b) 8% compounded semiannually?

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a) 15th: $476.74; 30th: ...

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