To answer this question, we can use either the FV or the PV formula.

Both will give the same answer since the

6
inverse of each other. We will use the FV formula, that is:

FV = PV(1 + r)t FV 290,000

T 18
Solving for r, we get: PV 55,000

r = (FV / PV)1 / t – 1 r 9.68%

r = ($290,000 / $55,000)1/18 – 1 = .0968 or 9.68%

216
e the same answer since they are the
 To answer this question, we can use either the FV or the PV formula. Both will give the same answer
9
since they are the inverse of each other. We will use the FV formula, that is:

FV = PV(1 + r)t FV 170,000

VP 40,000
Solving for t, we get: r 5.30%

t = ln(FV / PV) / ln(1 + r) t 28.017591

t = ln ($170,000 / $40,000) / ln
1.053 = 28.02 years
will give the same answer
mula, that is:
 0 10 20 24
X 1,500,000 2,500,000 vf=5,000,000
 200 1.12 1 178.571429
400 1.2544 2 318.877551
600 1.404928 3 427.068149
800 1.57351936 4 508.414463
2000 1432.93159
 0
1,000
 5

1 2 3 4 5 6 7 8
2000 -1500 2000 -1000
vf=?
3996
1.718
2326
0.59115593
47.2924743
21000
10%
2100 18900 399.640752 pago mensual

C 1 
VP  1 
r  (1  r )T 
TEA 16.08%

1.25% 16.08%

399.64 15% 48 14359.657

47.2924743 1.25%
18899.9644

C 1 
VP  1 
r  (1  r )T 
. Here we need to find the YTM of a bond. The equation for the bond price is:

P = $934 = $90(PVIFAR%,13) + $1,000(PVIFR

%,13)

Notice the equation cannot be solved directly

for R. Using a spreadsheet, a financial
calculator, or trial and error, we find:

R = YTM = 9.93%
Cupón 0 -934
1 90
2 90
3 90
4 90
5 90
6 90
7 90
8 90
9 90
10 90
11 90
12 90
13 1090

9.93%
tion for the bond price is:

10.15%

-0.000
 Any bond that sells at par has a YTM equal to the coupon rate. Both bonds sell at par, so the initial YTM on both
16
bonds is the coupon rate, 9 percent. If the YTM suddenly rises to 11 percent:

= $45(PVIFA5.5%,6) +
PSam = $950.04
$1,000(PVIF5.5%,6)
VN 1000 45

= $45(PVIFA5.5%,40) +
PDave = $839.54
VN 1000 $1,000(PVIF5.5%,40) 45

The percentage change in price is calculated as:

Percentage change in price = (New price – Original price) /

Original price

DPSam% = ($950.04 – 1,000) / $1,000 = – 5.00%

DPDave% = ($839.54 – 1,000) / $1,000 = – 16.05%

If the YTM suddenly falls to 7 percent:

= $45(PVIFA3.5%,6) +
PSam = $1,053.29
$1,000(PVIF3.5%,6)

= $45(PVIFA3.5%,40) +
PDave = $1,213.55
$1,000(PVIF3.5%,40)

= ($1,053.29 – 1,000) / $1,000 = +

DPSam% 5.33%

= ($1,213.55 – 1,000) / $1,000 = +

DPDave% 21.36%

All else the same, the longer the maturity of a bond, the greater is its price
sensitivity to changes in interest rates.
 C 1 
VP  1 
r  (1  r )T 
ell at par, so the initial YTM on both
rises to 11 percent:

9%

11% 6 224.798864 725.245833 950.044697 -5%

6%

11% 40 722.075611 117.463142 839.538753 -16%

6%
23 The bond has 14 years to maturity, so the bond price equation is:

P = $1,089.60 = $36(PVIFAR%,28) + $1,000(PVIFR

%,28)

Using a spreadsheet, financial calculator, or trial

and error we find:

R = 3.116% VP de cupones
VP del nominal
This is the semiannual interest rate, so the YTM is: Precio del bono

YTM = 2 ´ 3.116% = 6.23%

The current yield is the annual coupon payment

divided by the bond price, so:

Current yield = $72 / $1,089.60 = .0661 or 6.61%

Cuopon/Precio
uation is:

C 1 
VP  1 
r  (1  r )T 
36 18.5007527 666.027099 YTM 3.12%
1000 2.36118285 423.516544

1089.54364

0 -1089.6
1 36

2 36
3 36

4 36
5 36
6 36
7 36
8 36
9 36
10 36
11 36
12 36
13 36
14 36
15 36
16 36
17 36
18 36
19 36
20 36
21 36
22 36
23 36
24 36
25 36
26 36
27 36
28 1036
3.116%