mazielynn84
28.12.2020 •
Business
A bond with a 5-year maturity has a face value of 1,000 and coupon of 8%. Its amortization schedule is 20% at the end of year 3 and 20% at the end of year 4. What is its total cash flow at the end of year 3?
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Ответ:
Its total cash flow at the end of year 3 is:
$792.
Explanation:
a) Data and Calculations:
Maturity of bond = 5 years
Face value = $1,000
Coupon rate = 8%
Amortization schedule for each year = 20% (100/5)
Bond’s Periodic Cash flows:
End of year 1 = $200 + $80 interest ($1,000 * 8%) = $280
End of year 2 = $200 + $64 interest ($800 * 8%) = $264
End of year 3 = $200 + $48 interest ($600 * 8%) = $248
Total cash flow at the end of year 3 = $792
Ответ:
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hope this helps