Answer:
The bond price annual coupon will be "$ 849.28". The further explanation is given below.
Explanation:
As we know,
The formula to find the Bond price will be:
⇒ [tex]PV(rate,period \ left,-coupon \ payment,-face \ value)[/tex]
Now,
Annual coupon bond price will be:
= [tex]PV(8 \ percent,30-18,-1000\times 6 \ percent,-1000)[/tex]
= [tex]849.28[/tex] ($)
Semi-annual coupon bond price will be:
= [tex]PV(\frac{8 \ percent}{2},(30-18)\times 2,\frac{-1000\times 6 \ percent}{2},-1000)[/tex]
= [tex]847.53[/tex] ($)
