Question 1186181: An annuity bond has level payments (coupon plus redemption) every coupon period. Thus it is a serial bond, but the redemption amounts decrease every period. A 10-year 10% annuity bond with 000 face amount 100,000 has semiannual payments of 100000/a 20|o.o5 which some would be coupon payment and some would be redemption payment. A purchaser wishes a yield of i(2) =.12. Find the price of the bond and construct the amortization schedule for the first 2 years.
Answer by ikleyn(52879)   (Show Source):
You can put this solution on YOUR website! .
In my view and in my opinion, there is TOO MUCH Finance in this problem,
where I am not familiar NEITHER with terminology NOR with the notions/conceptions.
May be other tutors will be able to contribute; but I am not.
Keep in your enlightened mind, that this forum is for Math, and most tutors
are familiar with Math (in its elementary/school parts), but not with -true- Finance.
We always highlighted this feature of this forum, and never made a secret of it.
May be, new Nobel laureates in Economics will be of help . . . (a joke).
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