You purchased one XYZ bond six years ago in the marketplace for $1,250. The bond's coupon rate is 7%. The bond matures 18 years from now.
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You purchased one XYZ bond six years ago in the marketplace for $1,250.

The bond's coupon rate is 7%.

The bond matures 18 years from now.

New bonds, similar in risk and quality to the XYZ bond that you currently own, are being

issued in the market with a coupon rate of 8%.

Calculate the price that a bond investor would be willing to pay to purchase your bond

today.

Assume that interest payments from the bond are received twice per year.

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