Hi everybody, I have recently submitted my IP1 (version SN3001 / 2010) and has been advised by the checker I have used the incorrect formula. Hence my formula is wrong. This is my calculation. Can someone advise? Q) How prices of fixed interest investments can change, illustrating the main concepts by calculating the purchase price of a 10-year government bond parcel with the following features: Ø three full years remaining until maturity Ø the bond’s coupon rate is 6.95% per annum, paid half-yearly Ø prevailing market interest rate is 7.20% per annum Ø parcel price of $100. Assuming you want to purchase a 10 year government bond of $100 parcel price (FV) with the following terms: Time to maturity: 3 full years or 1,095days Bond yield rate of 6.95% p.a. paid as a half-yearly coupon (C) Prevailing interest rate is 7.20% p.a. (I) The formula is PV (present value) = FV + C 1 + I PV = 100 + 6.95 1 + [0.072 x (1,095/365)] = 106.95 1.216 = $87.95 (purchase price of the bond parcel) Many thanks. I am happy to assist anyone else with some of the other questions.