to illustrate, assume that on jan 1,2011, candlestick issues $1mil of 5% bonds due in five year, with interest payable semi-annually. the purchases of the would recieve two cash inflows: (1) the principal of $1 mil to be paid at maturity and (2) 10 interest payments of $25000 ($1,000,000 x 5% x 6/12) received semi-annually over the term of the bond.
so i have the answer here
present value of $1 million received in 10 periods:...............$781,200
present value of $25000.......................................... $218,800
present value (current market price) of bonds.....................$1,000,000
(QUESTION: so how do you get $781,200 and $218,800 from the calculator?)
so how would you insert numbers in calculator
i just remember these stuff N=10 , i =2.5 but what about
P/Y, PMT, FV, PV (is what we're trying to find,
so i have the answer here
present value of $1 million received in 10 periods:...............$781,200
present value of $25000.......................................... $218,800
present value (current market price) of bonds.....................$1,000,000
(QUESTION: so how do you get $781,200 and $218,800 from the calculator?)
so how would you insert numbers in calculator
i just remember these stuff N=10 , i =2.5 but what about
P/Y, PMT, FV, PV (is what we're trying to find,