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Mr. Simpson buys a $1000 semi-annual coupon bond paying interest at 11.3%/year compounded semi-annually and redeemable...

Mr. Simpson buys a $1000 semi-annual coupon bond paying interest at 11.3%/year compounded semi-annually and redeemable at par in 16 years. Mr. Simpson's desired yield rate is 14.3%/year compounded semi-annually. After 9 years he sells the bond. Interest rates have dropped and the bond is sold to yield a buyer 12.8%/year compounded semi-annually. Determine the sale price.

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Calculation of sale price of bond after 9 years is shown below

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