Alan purchased a 20-year bond on its issue date for a price that gives him a yield to maturity of 6% p.a.(nominal) The bond has a face value of $1000 and pays semi-annual coupons at 5% p.a. (nominal). 6 years later, immediately after Alan received the coupon, he offers to sell the bond to Nancy. Nancy wants a yield to maturity of 4% for this bond.

The following equation can be used to find the maximum price ($X) Nancy should pay for the bond

For % round to nearest 1dp.(0.1%)

for n, show as an integer

For money amounts, round to the nearest cent

C =

i =

n =

FV =

Calculate the following variables in the above equation. The variables may or may not be of the same value.