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(Solved): A Government of Canada bond will pay $70 at the end of every six months for the next 14 years, and a ...



A Government of Canada bond will pay $70 at the end of every six months for the next 14 years, and an additional $2000 lump payment at the end of the 14 years. What is the appropriate price to pay if you require a rate of return of 7.9% compounded semiannually?

 



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Recurring payment ( A) = $70 No. of period (n)= 14×2=28 { each period is 6 months long} Nominal interest rate (r) = 7.9%2=0.0395 Lump payment at the e
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