Annual coupon=1000*7.7%=77
Hence current price=Annual coupon*Present value of annuity factor(9.7%,10)+$1000*Present value of discounting factor(9.7%,10)
=77*6.22456119+1000*0.396217565
=$875.51(Approx).
NOTE:
1.Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=77[1-(1.097)^-10]/0.097
=77*6.22456119
2.Present value of discounting factor=1000/1.097^10
=1000*0.396217565
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