Answer:
The bonds sell for $825.63
Explanation:
To calculate the price of the bond, we need to first calculate the coupon payment per period. The bonds are annual bonds so the coupon payment is per year.
Coupon Payment = 1000 * 0.057 = $57
Total periods = 15
The formula to calculate the price of the bonds today is attached.
Bond Price = 57 * [( 1 - (1+0.077)^-15) / 0.077] + 1000 / (1+0.077)^15
Bond Price = $825.63
