Question

John is considering acquiring a couple of Citigroup bonds, which were initially offered with a face value of $1000, a coupon rate of 12% per year (paid semiannually), and a maturity of 12 years. However, these bonds already paid 3 coupons and John is planning to buy them now, right before the next coupon payment (hence coupon received at John’s time “zero”). Find the pure price of each Citigroup bond if the current market interest rate for similar financial assets is 7% per year (compounded semiannually). Note: round your answer to two decimal places, and do not include spaces, currency signs, plus or minus signs, nor commas. Show all math, no abreviated formulas. For example do not say P/A or F/A actually write out the formula and solve for the answer. An exel table would be nice

Answer 1