What is the present value of the principal? - ProProfs Discuss
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What is the present value of the principal?

Now consider a bond with five years to maturity, a face value of $1,000, and a coupon rate of 6% paid semi-annually and the discount rate is 5%.

Asked by Leo, Last updated: Sep 18, 2021

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John Smith

John Smith

John Smith
John Smith

Answered Sep 08, 2016

The present value of the principal is $781.19, which represents the value today of the $1,000 principal value of the bond to be received in five years time.note: this method is also used to calculate the present value of strip bonds, which pay their face value at maturity and do not pay a regular income stream.the question is only asking you for the present value of the principal. to solve this question, your pmt entry should be $0 (you dont want to include the present value of the income stream in your calculation, so you set your pmt to $0).try the following:10 n2.5 i1,000 fv0 pmtcomp pv
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