Moerdyk Corporation's bonds have a 15-year maturity, a 7.25% semiannual coupon, and a par value of $1,000. The required rate of return is 6.2%. Based on semiannual compounding, What is the market price of a bond?

Bond price= $1,101.59

Explanation:

Giving the following information:

Time= 15*2= 30 semesters

Par value= $1,000

Rate of return= 0.062/2= 0.031

Cupon= (0.0725/2)*1,000= $36.25

To calculate the value of the bond, we need to use the following formula:

Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond price= 36.25*{[ 1 - (1.031^-30)] / 0.031} + [1,000/(1.031^30)]

Bond price= 701.42 + 400.17

Bond price= $1,101.59

i guess you could put raise the economic balance