On June 15, 2015, a company issues an 8% semiannual bond with a face value of $1,000,000. This bond will be redeemed, according to the policies of the company, in any of the coupon payment dates between 2026 and 2027 with a redemption value of $1,000,000, on any of the coupon payment dates between 2028 and 2030 with a redemption value of $1,200,000, or on any of the coupon payment dates between 2031 and June 15, 2033 with a redemption value of $1,300,000. Find the purchase price to have nominal returns of (a) 10% and (b) 6.5%.

THIS QUESTION IS ANSWERED HERE BUT WITH A SMALL DIFERENCE, PLEASE CONVERT IT AND EXPLAIN :

Here simply we have to calculate the bond pricing using the formula : Bondvalue=t=1T(1+r)tCoupon+(1+r)TParvalue g is the modified rate of return =r Parvalue/redemption value (here values are semi annual so please divide the rate by 2 ) g is .04 for 2016 and 2017, it is .0333 for 2018-2020, and it is .0308 for 2021-2023. (a) (i) Thus, gg for 2021-2023. For 2016-2017 use earliest date 6/15/16: P=1,116,588 For 2018-2020 use earliest date 6/15/18:P=1,217,373 For 2021-2023 use latest date 6/15/23:P=1,252,660 Here simply we have to calculate the bond pricing using the formula : Bondvalue=t=1T(1+r)tCoupon+(1+r)TParvalue g is the modified rate of return =r Parvalue/redemption value (here values are semi annual so please divide the rate by 2 ) g is .04 for 2016 and 2017, it is .0333 for 2018-2020, and it is .0308 for 2021-2023. (a) (i) Thus, gg for 2021-2023. For 2016-2017 use earliest date 6/15/16: P=1,116,588 For 2018-2020 use earliest date 6/15/18:P=1,217,373 For 2021-2023 use latest date 6/15/23:P=1,252,660