Answer:
Bond Price= $4,522.47
Explanation:
Giving the following information:
Cupon= 5,000*0.027= $135
YTM= 3.7%
Face value= $5,000
Perios= 12 years
To calculate the price of the bond, we need to use the following formula:
Bond Price= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
Bond Price= 135*{[ 1 - (1.037^-12)] / 0.037]} + [5,000/(1.037^12)]
Bond Price= 1,289.33 + 3,233.14
Bond Price= $4,522.47
