Kim Shaw is considering the purchase of a $6$ year bond that pays a coupon rate of $6\mathrm{.}75\%$ over the life of the bond $($annual payments$)$ and a face value of $$1000$ that is returned at the bond's maturity. Using a yield to maturity of $7\mathrm{.}00\%,$ calculate to the nearest penny the value of the bond today.

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Place your answer in dollar and cents without a dollar sign or comma. For example, an answer of one thousand seventy five dollars and forty five cents would be entered $1075\mathrm{.}45.$ Work your analysis using at least four decimal places of accuracy.

Answer rating: 100% (QA)

To calculate the value of the bond today we can use the present value formula for a bo... View the full answer