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Finance

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I am having a hard time figuring out the equation that I should be using to determine the value of a $1000 denomination for a Bond with a 7% coupon rate maturing in 20 years with a required interest rate of 8%. Is there maybe any online calculators that can help?

  • Finance -

    Here is an equation. There may be a calculator available but I didn't see it.
    http://en.wikipedia.org/wiki/Bond_valuation

  • Finance -

    Here is a calculator. I don't know if this is exactly what you want or not. Let me know. http://www.calcxml.com/do/inv03

  • Finance -

    You want a yield to maturity of 8%, presumably because that is the current market rate for that type of bond and maturity, so that is what is "required".

    Using (Broken Link Removed) and a trial and error method, I compute that a current bond price of $902 will yield 8% to maturity.

    Bonds typically pay interest semiannually.

  • Finance -

    Thank you both very much! This should help me!

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