"BOND, ANNUITY, PURCHASE PRICE, BUYING at PREMIUM or DISCOUNT. An ANNUITY BOND of face value FACEVALU is a contract to pay an annuity PERPAYMN for a term of NUMYEARS (or NPERIODS). Its present value at the bond rate is its face value and it is mwithout value at term. BNDRATE% is its nominal or face interest rate. NUMYEARS is the term of the bond in years from purchase date. INVRATE% is the investor's desired interest rate, if purchased at the end of period PERIOD#. PAYMNINT is the payment interval in months (=1 for month, =3 forquarter, =6 forsemiannully, =12 for annually). PERPAYMN is the periodic interestpayment which is constant over the bond term. PURPRICE is the investor's purchase price at period PERIOD#. The redemption value of an ANNUITY BOND is $0.0. *** Answers to problems. *** (a) Set BNDRATE%=8, FACEVALU=100,000, INVRATE%=12, NUMYEARS=20, PAYMNINT=6, PERIOD#=10 (at end of 5*2 periods/yr), purchase price is $69,544.74. Type any key to exit. ||(a) A 20-year annuity bond for $100,000 with interest at 8% compounded semiannually, is to be paid off in 40 equal semiannual installments, the first payment due in 6 months. Find an investor's purchase price at the endof the 5th year to earn 12% compounded semiannually. Type , to see answers. Type (F2) to return to helpfile. ''(c) Copyright PCSCC, Inc., 1993"
