Compute the price of a 3.8 percent coupon bond with 18 years left to maturity and a market interest rate of 7 percent

Assume interest payments are paid semi-annually, and solve using semi-annual compounding

3.8%, Annual Coupon=3.8% x $1000, Annual Coupon=$38.

Bond Price=$38 x (1-(1-/1.07) ^18)/0.07 + $1000/1.07^18.

Bond Price=$38 x 10.0591 +$1000 x 0.2959=$678.15.

price of bond is $678.15