present value of the bond s face value plus the present value of all interest paymen 610384

The selling price of a bond will be equal to the:

1. future amount of the bond”s face value, calculated by using the market interest rate
2. present value of all interest payments to be made over the bond”s remaining life, calculated by using the contractual interest rate.
3. present value of the face value using the contractual interest rate for discounting plus the present value of all remaining interest payments using the market interest rate for discounting.
4. present value of the bond”s face value plus the present value of all interest payments to be made over the bond”s remaining life, both calculated by using the market interest rate for all present value computations.