6.2 The coupon is 9% of $1,000, or $90 a year. First value the 6-year annuity of...

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6.2 The coupon is 9% of $1,000, or $90 a year. First value the 6-year annuity of coupons: PV = $90X(6-year annuity factor) 1 = $90x L.12.12(1.12) = $904.1114=$370.03 Then value the final payment and add: PV= $1,000 (1.12)6 = $506.63 PV of bond = $370.03+$506.63=$876.66

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