a) To the nearest dollar, what is the current price of an 8%, $1,000 annual coupon bond that has sixteen years to maturity and a yield to maturity of 7%?

b) What is the coupon rate of an annual bond that has a yield to maturity of 8.5%, a current price of $942.32, a par value of $1,000 and matures in thirteen years?

Answer: (a) $1,094; (b) 7.75%

Show your work for both parts of the question.