What is the market price of a $1,000, 8 percent bond (paying interest semi-annually) if comparable market interest rates drop to 6 percent and the bond matures in 15 years?
Interest Rate Per Period x Bond Face Value = Interest Payments
PV Annuity Factor x Interest Payments = PV of Interest Payments *
PV of $1 x Bond Face Value = PV Bond Face Value *
PV of Interest Payments + PV Bond Face Value = Bond Market Price (The answer)
please include the math