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NEW QUESTION: 1
An investor buys a 25-year, 10 percent annual pay bond for $900 planning to sell the bond in 5 years when he estimates yields will be 9 percent. What is the estimate of the future price of this bond?
This is a Present Value problem 5 years in the future. Input into your calculator:
N = 20, PMT = 100, FV = 1000, I/Y = 9CPT PV = 1,091.28The $900 purchase price is a distracter for this problem.