Vangaurd Health System bonds have an annual coupon rate of 8 percent and a par value of $1,000 and will mature in 20 years. If you require a 7 percent return, what price would you be willing to pay for a Vangaurd bond

Price willing to pay=$1105.94

Explanation:

Annual Coupon Payment=$1,000*0.08

Annual Coupon Payment=$80

Calculating Present Value (PV) of Par Value:

Where:

i is the rate of return.

FV is par value

PV= $258.419.

Calculating PV of annual Coupon Payment:

i is the coupon rate

A is the annual Payment

PV=$847.521

Price willing to pay= Present Value (PV) of Par Value+ PV of annual Coupon Payment

Price willing to pay=$258.419+$847.521

Price willing to pay=$1105.94

if i need to borrow money for anything, it would be for something like a house or an apartment but, that depend on the situation.

is this good enough?