Determine the new price of the bonds


Question: Leggio Corporation issued twenty year, 7 percent yearly coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds has dropped to 6 percent. Determine the new price of the bonds, given that they now have 19 years to maturity?

[A] $1,133.40

[B] $1,177.78

[C] $1,189.04

[D] $1,046.59

[E] $1,111.58

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Finance Basics: Determine the new price of the bonds
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