= NPV (0.06, 42000, 42000, 42000, 42000, 42000, 42000, 42000, 42000, 42000)
Principal Amount of bonds: 600,000
Stated interest rate: .07
Effective (market) interest rate: .06
Number of interest periods: 9
Price Computation:
PV of Principal [ use PV function]: 355139
PV of interest payments [use PV function]: 285671, BUT HOW DO I CALCULATE THIS?
Total: 640810
I am given the correct answer of 285671 but I have no idea how they got that number.
Please help, and thank you!
