Fm doubt- finanacing dicisions

harish ragav (student-IPCC) (407 Points)

21 December 2013  

Reserve bank of india proposing to sell 5 year bond of rs 5000 @ 8 % interest p.a.the bond amount will be amortized equally over the life of the bond. what is the bond's present value for an investor if he expects a minimum rate of return of 6% ?

i didn't understand the question in the correct manner can any one pls explain the question briefly.

for ref:- ipcc gr1 FM stud mat page 4.7.

thanks in advance.