Callable Bond Example: Suppose an 8% coupon, 30-year maturity semi-annual bond sells for $1,150 and is callable in 10 years at a call price of $1,100. If the interest rate is 8% in 10 years, should the issuer call back the bond, i.e., repurchase the bond at the call price? The issuer will repurchase the bond if the bond is worth more than $1100 in ten years. PMT=40, N=40, FV=1000, 1/Y=8%, PV=1000