Question: Tom and Jack purchased bonds on the same day. Both bonds are redeemable at par and have a yield of i = 6% and a face value of $10,000.
(a) If Tom's bond pays annual coupons at the rate of 8% and it has 15 years to maturity, then how much does he pay for it?
(b) If Jack's bond has 10 years to maturity and he pays $11,487.75 for it, then what is the annual coupon rate?