Find the present value of such stream of cash payments

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Reference no: EM13874599

A U.S. treasury bond (selling at a par value of $1,000) that matures at the end of 5 years is said to have a coupon rate of 6% if, after paying $1,000, the purchaser receives $30 at the end of each of the following 9 6-month periods and then receives $1,030 at the end of the tenth period. That is, the bond pays a simple interest rate of 3% per 6-month period, with the principal repaid at the end of 5 years. Assuming a continuously compounded interest rate of 5%, find the present value of such a stream of cash payments.

Reference no: EM13874599

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