Union local school district has bonds outstanding with a coupon rate of 3.5 percent paid semiannually and 13 years to maturity. the yield to maturity on these bonds is 2.5 percent and the bonds have a par value of $10,000. what is the price of the bonds?
10,718.63 ± .1%
To find the price of this bond, we need to find the present value of the bond's cash flows. So, the price of the bond is:
P = $145(PVIFA1.25%,48) + $10,000(PVIF1.25%,48)
P = $10,718.63
