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Compute the price of a bond-total value of bonds

Problem:

The Southeast Investment Fund buys 70 bonds of the Hilary Bakery Corporation through its broker. The bonds pay 9% annual interest. The yield to maturity (market rate of interest) is 12%. The bonds have a 25-year maturity. Using an assumption of semiannual interest payments:

a. Compute the price of a bond (refer to "semiannual interest and bond prices" )

b. Compute the total value of the 70 bonds.

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Finance Basics: Compute the price of a bond-total value of bonds

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