BU111 Lecture 30: Notes30
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BU111 Full Course Notes
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Bond example remember: bonds pay coupons semi-annually and interest is compounded semi-annually. Gm is the issuer of the bond significance of 2021 is the maturity date: return of face value, coupon payments stop. 9. 5% coupon rate = a year over 10 years + in 10 years. Calculate pv of 10 years of semi-annual annuity payments of . 50 + single payment of to be received in 10 years. Pmt of annuity = 95/2 bonds pay interest semi-annually. Interest and payments happen at the same frequency (twice a year) r = 0. 105/2 = 0. 0525 n = 10 * 2 = 20: plug numbers into formula. Calculate your mortgage payments if you buy a house for 000, make a down payment of. 000, pay 6% interest compounded semi-annually, and make monthly payments. Mortgages are calculated over 25 years, but we actually only sign for 5 years or less.
