math banking question

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dmillionaire

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A bond pays $1,000 interest at the end of every year for the next 30 years. What is the current economic value of each of the 15th and 30th payments if we discount the payments at:



a.5% compounded semiannually?


economic value of 15th payment

economic value of 15th payment

im having some trouble finishing this question i know its

i= 5%/2 = 2.5% = .025

n = (not to sure about this if its 2 (semi annually) x 15 yrs = 30

then i get lost because not sure if n is correct 1000(1+0.025) ^ 30
 
dmillionaire said:
A bond pays $1,000 interest at the end of every year for the next 30 years. What is the current economic value of each of the 15th and 30th payments if we discount the payments at:



a.5% compounded semiannually?


economic value of 15th payment

economic value of 15th payment

im having some trouble finishing this question i know its

i= 5%/2 = 2.5% = .025

n = (not to sure about this if its 2 (semi annually) x 15 yrs = 30

then i get lost because not sure if n is correct 1000(1+0.025) ^ 30
Click to expand...
Denis is quite right that this problem is described weirdly. I have never heard of such a bond, and I spent 32 years in banking.

Does this bond have a face value?

How and when is it paid?

Excluding bonds backed by consumer loans, a bond is usually a bullet bond, a sinking fund bond, or a perpetuity (like the British consols). Finally, a bond usually has a coupon rate. As described, this bond has only a coupon amount.

Are you SURE you have stated the problem EXACTLY as given in your text?
 
JeffM said:
Denis is quite right that this problem is described weirdly. I have never heard of such a bond, and I spent 32 years in banking.

Does this bond have a face value?

How and when is it paid?

Excluding bonds backed by consumer loans, a bond is usually a bullet bond, a sinking fund bond, or a perpetuity (like the British consols). Finally, a bond usually has a coupon rate. As described, this bond has only a coupon amount.

Are you SURE you have stated the problem EXACTLY as given in your text?
Click to expand...

yeah so confusing, this teacher rushes through stuff and only teaches you how to punch it in through a calculator but doesn't know how to do it on my "financial calculator" lol what kinda teacher is that eh anyway let me re-post the exact question

A bond pays $1,000 interest at the end of every year for the next 30 years. What is the current economic value of each of the 15th and 30th payments if we discount the payments at:
a.5% compounded semiannually? (Round your answers to the nearest cent.)
Economic value of 15th payment$
Economic value of 30th payment$

b.8% compounded semiannually? (Round your answers to the nearest cent.)
Economic value of 15th payment$
Economic value of 30th payment$

 
ooo never mind 476.74 was the correct answer for the first part of a , i think i should be able to find the rest out now, i really appreciate your help!
 
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