# Calculation problem

Hi guys, firstly sorry if I’m posting in the wrong section, I don’t really know where to post this… I have to take a maths test and I don’t know how to solve the following issues , this question for your guys I think it should be a piece of cake because it’s for a test much less difficult than CFA !

This question comes from a study guide and I’m trying to use a financial calculator to do but can’t seem to get it right! Hope you can help me , here’s question: Company A issues a three-year bonds with a coupon rate of 10%, a face value of HK\$20,000 and dividends paid once a year. At the time of issue, market investors required a return of 8%. According to the above terms, what is the market price of the bond? Accord to the study guide the answer is : 21,030.83 but I don’t know how to get to this answer! My assumption is: N: 3 I/Y : So far I’ve tried 10% , 8%, 18% and 108% (and it all came out wrong) PMT: 2000 FV: 20000 I’m sure my assumption is wrong! Please help?? Thank you!!!

C= 0.1 x FV of 20.000 = 2000

and input into calculator

FV = 20.000

PMT= 2000

I/Y = 8

N = 3

CPT - PV = -21.030,83

You may ignore - prefix, just means that is the PV of bond. If you have incorrect output with same inputs, there are few solutions:

1. you did something wrong like incorrect CF prefix

2. you should clear the memory of calculator

3. you should try on another calculator

If you are using a BAII, make sure P/Y=C/Y=1 and payments are set to END.

Wow I got the right answer now thank you so much!