BUS–A 201 at Indiana University--Bloomington

4. Selling for a Premium

in Topic 11 (Video 4 of 8)
When a bond's coupon rate is higher than the market rate, that bond is going to sell for a premium. We'll calculate that premium in this video.

This Video Mentioned Some Formulas

Bond Face Value * PV$1(i,n)
+ Payment Amount * PVOA(i,n)
Bond Selling Price
When calculating the selling price, be sure to use the Market Rate for i.

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