Answer:
Total $46,319.9565
Explanation:
We need to calculate the value of the present value of the bond payment
and the maturity using the current market rate
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 2500 (50,000 x 0.10/2)
time 10 (5 years 2 payment per year)
rate 0.06 (12% annual --> divide by 2 to convert semiannual)
[tex]2500 \times \frac{1-(1+0.06)^{-10} }{0.06} = PV\\[/tex]
PV $18,400.2176
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 50000
time 10
rate 0.06
[tex]\frac{50000}{(1 + 0.03)^{10} } = PV[/tex]
PV $27,919.7388
PV bond interest payment $18,400.2176
PV maturity payment $27,919.7388
Total $46,319.9565
