Seven years ago, Eastern Corporation issued 20-year bonds that had a $1000 paid interest annually, and that had a coupon rate of interest of 7 percent. if the market rate of interest is 5.5 percent today, what is the current price of an Eastern Corporation bonds? are these bonds selling at a premium or discount?

Bigbox, Inc., has bonds outstanding that will mature in eight years. These bonds pay interest semi- annually and have a coupon rate of 4.6 percent. If the bonds are currently selling at $888.92, what is the yield to maturity that an investor who buys them today can expect to earn? What is the effective annual yield?