The corresponding formula for bond value given in Cox et al. If the interest rate increases the bond value falls and vice versa. The value of the bond is Rs.
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The present value of 100 is 100 X 822 8220. Youll learn about the book value vs market value vs face value of bonds in this tutorial and youll understand how to calculate and project them in financi. Therefore the price of each coupon bond is expected to be 116351. The price is therefore equal to the present value of an annuity the coupons plus the present value of a sum the face value.