Assume a $1,000 face value bond has a coupon rate of 7.7 percent paid semiannually and has an eight-year life.

(a)

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If investors are willing to accept a 10.6 percent rate of return on bonds of similar quality, what is the present value or worth of this bond? (Round factor value calculations to 5 decimal places, e.g. 0.52755. Round other intermediate calculations to 2 decimal places, e.g. 52.75. Round final answer to nearest dollar amount.)

Present value

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