QUESTION: A 20-year Bond was issued at par value of $1000 with a 7.5% per year coupon rate. Coupon interest payments are made semi-annually. Two years after issuance, the Bond sold for $965.

A. What should the market price of the bond be four years after issuance if the current market interest rate for comparably rated bonds is 12% per year compounded semi-annually? (Assume the seller recieves the coupon payment at the end of four years before the sale)

B. Six years after issuance the bond sells for $1060. What is the current yield of the bond at that price and time in terms of rate per 1/2 year (6 months) AND efective rate per year?

This Question is for an Engineering Economy Class, and was given during a practice test.. Please answer in detail, with steps shown. I'm not looking for an EXCEL answer, as during our tests we won't have a computer. I will thumbs down any excel answer as that is NOT what I'm asking for. Thank you for your help.