Answer:
$2.08
Explanation:
For computing the amount of premium amortized in the 6 coupon payment first we have to need to find out the present value which is shown below:
Given that
NPER = 5 × 2 years
RATE = 7.5 ÷ 2 = 3.75%
PMT = $1,000 × 8% ÷ 2 = $40
Future value = $1,000
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after applying the above formula, the present value is $1,020.53
Now the amount of premium is determined by preparing the amortization schedule i.e to be shown in the attachment
Interest = beginning value × rate
