Question

What is the price of a bond with a coupon rate of 7%, payable semi-annually, a face value of $1000, 8 years to maturity, and a yield to maturity of 7.7%?

Answer 1

Face Value	$                1,000
Coupon Rate	7.00%
Discounting Rate	7.70%
Redemption Value	$                1,000
Years To Maturity	8
Coupon Payment Duration	Semi-Annually

a	Semi-annual Interest Amount	$             35.00
	($1000*7%/2)
b	PV Annuity Factor for (16 Years,3.85%)	11.782299
c	Present Value Of Annual Interest (a*b)	$           412.38
d	Redemption Value	$       1,000.00
e	PV Factor Of (16 Years,3.85%)	0.54638
g	Present Value Of Redemption Amount (d*e)	$           546.38
f	Intrinsic Value ( Price ) Of The Bond (c+g)	$           958.76