Assume that it is November 15, 2014. Consider a 20-year US Treasury bond that was originally issued on November 15, 1996. The bond matures on November 15, 2016 and has a coupon rate of 7.50%. The coupons are paid semi-annually. The yield to maturity is 0.42 %. The bond was sold in face value increments of $100. Using either the PVA formula or the bond pricing formula (discounting of cash flows), what is the current price of the bond? Is this bond priced at a premium, discount, or at par? And, why? Explain. Begin with the general formula. Show all your work.

USE PVA FORMULA*