200000=5300*(PVIF)r%,25 years 200000=5300/(1+r)^25 r=((200000/5300)^.04)-

Suppose a company has issued deep discount bands which has
face value of INR 200000 maturing after 25 years.the bondes
was issued at INR 5300.whar is the effective interest rate
earned by the investor from this bond?

Question Posted / shiks

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Answer Posted / shiks

200000=5300*(PVIF)r%,25 years
200000=5300/(1+r)^25
r=((200000/5300)^.04)-1
r=15.63%

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