Harrison Co. issued 16-year bonds one year ago at a coupon rate of 6.2 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.4 percent, what is the current dollar price assuming a $1,000 par value

$1,743.65

Explanation:

The current dollar price on this bond is its Present Value (PV) and is calculated as follows :

N = 16 × 2 = 32

P/yr = 2

Pmt = ($1,000 × 6.2%) ÷ 2 = $62

i = 5.4 %

FV = $1,000

PV = ?

Using a financial calculator to input the values as above, the current dollar price on this bond is $1,743.65

answer; closing the loop;

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