Information provided:
Par value= future value= $1,000
Time= 8 years
Annual coupon payment= $65
Yield to maturity= 6.7%
The price of the bond is calculated by computing the present value.
Enter the below in a financial calculator to compute the present value:
FV= 1,000
N= 8
PMT= 65
I/Y= 6.7
Press the CPT key and PV to compute the present value.
The value obtained is 987.92.
Therefore, the price of the bond is $987.92.
In case of any query, kindly comment on the solution.
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