Magnus, Ltd. has issued a bond with a face or par value of $1,000. The bond has a coupon rate of 5.4% and interest is paid semiannually. The bond will mature in 20 years. The current yield or market rate is 4.8% annually.

a) Set up a line diagram illustrating the cash flows involved in this bond issue.

b)Set up the mathematical expressions (time value formulas) using numbers from the problem for finding the purchase price and evaluate the expression to find the purchase price of the bond