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Price of bonds after discount

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1a. What is the cash flow of a 6% coupon bond that pays interest annually, matures in 7 years, and has a principle of $1,000?

1b. Assuming a discount rate of 8%, what is the price of the bond?

1c. Assuming a discount rate of 8.5%, what is the price of the bond?

1d. Assuming a discount rate of 7.5%, what is the price of the bond?

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The solution explains how to calculate the price of a bond

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1a. What is the cash flow of a 6% coupon bond that pays interest annually, matures in 7 years, and has a principle of $1,000?

The cash flows are the annual interest and the repayment of principal on maturity. The annual interest is $1,000X6%=$60 and the repayment on maturity is $1,000 which is the ...

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