Ch 4 Insert Page Layout Formulas Data Review View Home ?. A- A? | , Calibri (Bod

Question

Ch 4 Insert Page Layout Formulas Data Review View Home ?. A- A? | , Calibri (Body)-||11 Paste The bond you willuse, to answer all the questions is as follows Time (yrs) Coupon Principal 0.5 16 16 16 16 16 16 16 16 16 16 1.5 2.5 3.5 4.5 10 12 13 14 15 1000 1 16 in other words, it is a $1,000 par value, S-year, 17 18 43 19 3.2% coupon bond. The 3.2% isi upper-2, so we see the coupons as above. Construct the amortization schedule for your bond assuming you pay $900 for it at time zero. Time (yrs) Beg Balance Interest Payment End Balance 21 900 o.5 900 25 1.5 2.5 3.5 4.5 29 32

Explanation / Answer

FV 1000 PMT 16 NPER 10 PV 900 Rate(YTM) 2.76% per period 5.52% Annual Time Yrs Beg Balance Interest (Beg Bal x 2.76%) Payment Discount amortization End Balance A B C = A-B Beg Bal+Disc amortization 0 900             0.5 900 24.84 16 8.84 908.84 1 908.84         25.08 16                  9.08                                       917.92 1.5 917.92         25.33 16                  9.33                                       927.26           2.00 927.26         25.59 16                  9.59                                       936.85           2.50 936.85         25.86 16                  9.86                                       946.71 3 946.71         26.13 16                10.13                                       956.84 3.5 956.84         26.41 16                10.41                                       967.25 4 967.25         26.70 16                10.70                                       977.94 4.5 977.94         26.99 16                10.99                                       988.93 5 988.93         27.29 16                11.29                                          1,000

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