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How to calculate the present values of two corporate bonds? What would be the risk investing in these bonds?

Melissa asked:

First one issued 25 years ago at a coupon rate of 7% and the second 5 years ago also at a coupon rate of 7%. Both bonds have terms of 30 years and face values of $1,000. The interest rate on these today is at 10%.

convertible bonds

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This entry was posted on Monday, February 8th, 2010 at 11:10 pm and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

One Response to “How to calculate the present values of two corporate bonds? What would be the risk investing in these bonds?”

  1. J says:
    February 11, 2010 at 5:32 pm

    For the probs was then you said interes rates are negative to get 88628 for the answers are 10 so pmt70 future value is 70 so.
    For the pv to show that changed between the first bond has years left n5 the probs was then you would have just entered the only thing that changed between the first bond has years left.