Maestro Inc has a $1,000, 6% coupon bond with interest payable semiannually and a remaining term of 20 years. The market yield on similar bonds is 10%. What percentage of face value is the bond selling for today

65.682%

Explanation:

The computation of the percentage is shown below;

But before that first determine the present value i.e.

Given that

Future value = $1,000

PMT = $1,000 × 6% ÷ 2 = $30

RTAE = 10% ÷ 2 = 5%

NPER = 20 × 2= 40

the formula is shown below;

= -PV(RATE,NPER,PMT,FV,TYPE)

After applying the above formula, the present value is $656.82

Now the percentage is

= $656.82 ÷ $1,000

= 65.682%

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