investment grade bond
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Free InquiryBy the end of this year, you will be 35 years old and you want to plan for your retirement. You
wish to retire at the age of 65 and you expect to live 20 years after retirement. Upon retirement
you wish to have an annual sum of $50,000 to supplement your social security benefits.
Therefore, you opened your retirement account with a 7% annual interest rate. At retirement
you liquidate your account and use the funds to buy an investment grade bond which makes
$50,000 annual coupon payments based on a 6 % coupon rate, throughout your retirement
years.
How much will be the face value of the bond that you will be investing?
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