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Greg buys a $1000 bond paying bond interest at i(2)=6.5%, and redeemable at par in 20 yeaes. Greg's desired yield rate i(2)=7%. (a) how much

Greg buys a $1000 bond paying bond interest at i(2)=6.5%, and redeemable at par in 20 yeaes. Greg's desired yield rate i(2)=7%.

(a) how much did he pay for the bond?

(b) after exactly 5 years he sells the bond. interest rates have dropped and the bond is sold to yield a buyer i(2)=6%. determine the sale price.

do not use excel, most be solved by hand.

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