Homework Help: Economics - Bonds

Posted by Val on Saturday, October 28, 2006 at 12:26am.

The Garraty company has two bond issues outstanding. Both bonds pa $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years and Bond S a maturity of 1 year. A). What will be the value of each of these bonds when the going rate of inters is (1) 5 percent, (2) 8 percent and (3) 12 percent? Assume that there is only one more interest payment to be made on Bond S.
I don't need the answers, I just want to know the process in how to solve. Thank you.

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