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I am trying to solve the following problem:

Debtor issued a bond on 20 000€ (including interest rate) with maturity rate of 8 months and interest rate of 8% per annum. Month later, the creditor sold the bond to a different person, who discount the bond with 9% interest rate p.a.

How much did the creditor receive for the bond?

My solution is the following:

$FutureValue$ $= P(1+i*t*t/12) = 20000(1+0,08*8*8/12) = 28533$

Is it correct? Thanks

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  • $\begingroup$ Are you trying to figure out the future value initially or the price that the bond was sold for? $\endgroup$ Sep 24 '19 at 4:32

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