Exam 15: Bond Valuation and Sinking Funds

Waterton Motel made equal payments at the end of every six months into a sinking fund for 11 years.If the fund had a balance of $100 000.00 after 11 years and interest is 5.4% compounded semi-annually,what was the accumulated balance in the fund after seven years?

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?

Bonds with a face value of $130 000 redeemable at par bearing 4.5% coupons payable quarterly are sold six years before maturity to yield 5.25% quarterly.Determine a)the premium or discount; b)the purchase price?

Find the gain or loss on the sale without constructing a bond schedule for a $100 000,8% bond with semi-annual coupons redeemable at par purchased eleven-and-a-half years before maturity to yield 9% compounded semi-annually.The bond was sold five years later at 99.125.

A $100 000.00,7.2% bond with quarterly coupons redeemable at par is purchased 11 years before maturity to yield 6% compounded semi-annually.Determine the premium or discount.

Nick buys a $25 000,5.4% bond with quarterly interest coupons,3 years before maturity,to yield 3.5% compounded quarterly.Determine the premium or discount.

Nick buys a $25 000,5.4% bond with quarterly interest coupons,3 years before maturity,to yield 7% compounded quarterly.Determine the premium or discount.

A $100 000 bond,redeemable at 110 in seven years with 6.75% coupons payable annually,is bought to yield 7.25% compounded annually. (i)Determine the discount and the purchase price. (ii)Construct a schedule of accumulation of discount.

A $40 000.00,5% bond with semi-annual coupons redeemable at par in 14 years is purchased to yield 7% compounded semi-annually.What is the gain or loss if the bond is sold three years before maturity at 99.75?

From his retirement fund,Jack buys a $50 000,5.4% bond with quarterly interest coupons at 95.9,redeemable at par in 15 years.What is the approximate yield rate?

A $1000 bond,with interest at 8% payable semi-annually on January 1 and July 1,was purchased on February 8,2012.The bond matures on July 1,2015 and yields 2.2% compounded semi-annually.What is the purchase payment for the bond?

A $250 000,6.5% bond with semi-annual coupons redeemable at par is bought 17.5 years before maturity at 78.25.What was the approximate yield rate?

Find the gain or loss on the sale without constructing a bond schedule for six $5000,9.5% bonds with interest payable semi-annually redeemable at par bought twenty-one years before maturity to yield 10.5% compounded semi-annually.The bonds were sold three years later at 103.625.

A $50 000.00,8% bond with quarterly coupons redeemable at par is purchased five years before maturity to yield 4% compounded semi-annually.Determine the premium or discount.

Twenty $5 000 bonds redeemable at par bearing 6% coupons payable quarterly are sold eight years before maturity to yield 5.5% compounded annually.What is the purchase price of the bonds?

What is the amount of interest earned in the 33^rd semi-annual deposit interval of a sinking fund that is set up to pay back a debt of $220 000 over 19 years? The fund earns 4.62% compounded semi-annually and the deposits are made semi-annually.

A sinking fund amounting to $115 000.00 is to be created by making payments at the beginning of every six months for 6 years.Interest earned by the fund is 6.5% compounded semi-annually.Determine the size of the semi-annual payments and prepare a sinking fund schedule showing totals.