A 10 year US Treasury Bond with a face value of 10,000 pays a coupon of 5.5% (2.75% of face value every 6 months). The semi-annual compounded interest rate is 5.2% ( a six month discount rate of 5.2/2 = 2.6%) What is the present value of the bond? Generate a graph or table showing how the bonds present value changes for semi-annual compounded interest rates between 1% and 15%.

    What is the present value of the bond?

    Present Value = 275 PVIFA(2.6%,20) + 10000 PVIF(2.6%,20) = $10,231.64

    Generate a graph or table showing how the bonds present value changes for semi-annual compounded interest rates between 1% and 15%.

    Table
    Semi Annual Interest RatePresent Value
    1$13,157.97
    2$11,226.36
    3$9,628.06
    4$8,301.21
    5$7,196.00
    6$6,272.28
    7$5,497.54
    8$4,845.47
    9$4,294.66
    10$3,827.67
    11$3,430.25
    12$3,090.76
    13$2,799.63
    14$2,548.98
    15$2,332.32