Answer:
Bond Price= $1,761
Explanation:
Giving the following information:
Par value= $2,000
Cuon= 0.063*2,000= $126
YTM= 7.5% = 0.075
Periods= 19 years
To calculate the price of the bond, we need to use the following formula:
Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
Bond Price= 126*{[1 - (1.075^-19)] / 0.075} + [2,000/(1.075^19)]
Bond price= 1,254.84 + 506.13
Bond Price= $1,761
