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Assume that you are considering the purchase of a 14-year, noncallable bond with an annual coupon rate of 8.4%. The bond has a face value

Assume that you are considering the purchase of a 14-year, noncallable bond with an annual coupon rate of 8.4%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 7.2% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

The present value (or the maximum price you would pay) will be

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