Exam 15: Bond Valuation and Sinking Funds

A $1 000 000, 9% bond with interest payable annually is redeemable at 104 in 5 years. What is the purchase price to yield 8% compounded quarterly?

A sinking fund of $100 000 is to be created by equal annual payments at the beginning of each year for 12 years. Interest earned by the fund is 5.5% compounded annually. a) Compute the annual deposit into the fund. b) Construct a sinking fund schedule showing totals.

Six $1500 bonds with 4.5% coupons payable semi-annually are bought to yield 5% compounded monthly. If the bonds are redeemable at par in eight years, what is the purchase price?

Sepaba Construction made equal payments at the end of every six months into a sinking fund for 15 years. If the fund had a balance of $1000 000.00 after 15 years and interest is 6% compounded semi-annually, what was the accumulated balance in the fund after 10 years?

A $100000, 9.0% bond with semi-annual coupons redeemable at par on March 1, 2015, was purchased on September 22, 2007, to yield 10.00% compounded semi-annually. What was the purchase price?

A $125 000 bond, redeemable at par in three years with 7.5% coupons payable quarterly, is bought to yield 6% compounded quarterly. (i) Compute the premium or discount and the purchase price. (ii) Construct a schedule for amortization of premium.

A $50 000, 4% bond with semi-annual coupons is purchased three years before maturity. Calculate the discount or premium if the bond is sold to yield 6% compounded semi-annually.

A 50 000 bond bears interest at 4.5% payable semi-annually and is redeemable at par on November 4, 2022. The bond is sold on March 20, 2013, to yield 5.5% compounded semi-annually. What is the cash price?

Three $25 000, 6% bonds with semi-annual coupons redeemable at par were bought eight years before maturity to yield 7% compounded semi-annually. Determine the gain or loss if the bonds are sold at 89.625 four years later.

A $100 000 bond bearing interest at 8% payable semi-annually is bought five years before maturity to yield 6% compounded annually. If the bond is redeemable at par, what is the purchase price?

A $50 000.00, 6% bond with semi-annual coupons redeemable at par in 14 years is purchased to yield 8% compounded semi-annually. What is the gain or loss if the bond is sold four years before maturity at 99.25?

A $25 000, 6% bond redeemable at par is purchased 11 years before maturity to yield 6.9% compounded semi-annually. If the bond interest is payable semi-annually, what is the purchase price of the bond?

A $5000, 6.25% bond with interest payable annually redeemable at par in eight years is purchased to yield 7.5% compounded annually. Find the premium or discount and the purchase price and construct the appropriate bond schedule.

Bonds in denominations of $10 000 redeemable at par in six years and four months are offered for sale. If the coupon rate is 6.5% payable quarterly and the expected yield is 8% compounded quarterly, determine a) the market price; b) the accrued interest; c) the cash price.

What is the purchase price of a bond that is issued on May 1, 2002 for 22 years at a coupon rate of 9.4% compounded semi-annually? The purchase date of the bond is May 11, 2007 and the yield rate is 8.5% compounded semi-annually. The bond has a face value of $5000 and is redeemable at par.

A 4.5% annuity bond of $500 000 with interest payable quarterly is to be redeemable at par in seven years. a) What is the purchase price to yield 6% compounded quarterly? b) What is the book value after 6 years? c) What is the gain or loss if the bond is sold six years after the date of purchase at 99.625?

A $150 000 bond redeemable at par on October 1, 2026, is purchased on January 15, 2014. Interest is 6% payable semi-annually and the yield is 7.5% compounded semi-annually. a) What is the market price of the bond? b) How much interest has accrued? c) What is the cash price?

To redeem a $100 000.00 promissory note due in 12 years, Flinstone Inc. has set up a sinking fund earning 7.25% compounded semi-annually. Equal deposits are made at the beginning of every six months. a) What is the size of the semi-annual deposits? b) How much of the maturity value of the fund is deposits? c) How much is interest?

Nine $10 000, 4% bonds with interest payable semi-annually and redeemable at par are purchased 8.5 years before maturity. Find the premium or discount and the purchase price if the bonds are bought to yield 6%.

What is the purchase price of a $10 000, 3.5% bond with semi-annual coupons redeemable at 104 in seven years if the bond is bought to yield 2.5% compounded semi-annually?