Tell me more ×
Quantitative Finance Stack Exchange is a question and answer site for finance professionals and academics. It's 100% free, no registration required.
up vote -4 down vote favorite

Question: I'm buying a bond that will pay me $1,000/year for 5 years starting 1 year from now. I want to make 12%/year on the investment, what should I pay for this today?

I got $3,604.77 by using the FV Annuity formula I have in my book. Is this correct?

share|improve this question
1  
I think this question is really an good example of what this forum is not about. I would vote to close this question, does this makes sense to other people than me ? – TheBridge Feb 9 '11 at 21:09
@TheBridge: I've been debating the same thing. It's on-topic but uninteresting and a lot like a homework question. – Joshua Ulrich Feb 9 '11 at 21:17
1  
IMO on-topic = valid question. Uninteresting is subjective = don't answer it, but allow the opportunity for others. Perhaps we need to add a homework tag? – Greg Feb 9 '11 at 21:59
@Joshua I had thought this was a CFA question. And I agree that it's officially on-topic, but it's like asking how variables work on Stack Overflow. – chrisaycock♦ Feb 9 '11 at 22:00
@Greg SO is trying to get rid of meta tags like "homework", etc. Though that hasn't stopped eager editors from retagging existing questions... – chrisaycock♦ Feb 9 '11 at 22:01
show 1 more comment

closed as too localized by olaker♦ Mar 12 '11 at 15:35

This question is unlikely to help any future visitors; it is only relevant to a small geographic area, a specific moment in time, or an extraordinarily narrow situation that is not generally applicable to the worldwide audience of the internet. For help making this question more broadly applicable, see the FAQ.

1 Answer

up vote 1 down vote

The general consensus is that if this is the guy that wrote the book you're using, and you didn't key anything in wrong, then the answer is correct.

http://en.wikipedia.org/wiki/Frank_J._Fabozzi

share|improve this answer

Not the answer you're looking for? Browse other questions tagged or ask your own question.