A 5-year amortizing security with a par value of $100,000 and a coupon rate of 6.4% has an expected cash flow of $23,998.55 per year assuming no prepayments. The annual cash flow includes interest and principal payment. What is the value of this amortizing security assuming no principal prepayments and a discount rate of 7.8%?
I have assigned the following values:
N=5, I/Y = 7.8%, PMT = 23,998.55 or 6400, FV = 100,000
However the answer given is not matching with calculation based on above values. Should PMT be 23,998.55 or 6400? Missing something here? Kindly suggest.
Regards,