You have just been offered a bond for $863.73. The coupon rate is 8 percent payable annually, and the yield to maturity on new issues with the same degree of risk are 10 percent.

You have just been offered a bond for $863.73. The coupon rate is 8 percent payable annually, and the yield to maturity on new issues with the same degree of risk are 10 percent. You want to know how many more interest payments you will receive, but the party selling the bond cannot remember. If the par value is $1,000, how many interest payments remain? (Do not round intermediate calculations. Round your answer to the nearest whole number.)

  Remaining number of interest payments years

 

Nper = ? (indicates the period)

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PV = -863.73 (indicates the price)

FV = 1000 (indicates the face value)

Rate = 10% (indicates rate of interest)

PMT = 1000*8% = 80 (indicates the amount of interest payment)

Period = Nper(Rate,PMT,PV,FV) = Nper(10%,80,-863.73,1000) = 12 Years

Answer is 12 Years