Annual coupon=1000*8%=80
Hence price of bond=Annual coupon*Present value of annuity factor(8.9%,9)+$1000*Present value of discounting factor(8.9%,9)
=80*6.01969691+1000*0.464246975
=$945.82(Approx).
NOTE:
1.Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=80[1-(1.089)^-9]/0.089
=80*6.01969691
2.Present value of discounting factor=1000/1.089^9
=1000*0.464246975
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