Suppose today is May 1st, 2021. Your aunt has some savings and she is looking for some alternative investments. Since you are taking a financial management course this semester, she asked for your help. After doing some research, you identified three bonds issued by The Pear Company (TPC), an American multinational technology company headquartered in California. TPC designs, develops, and sells consumer electronics, computer software and online services. All of its bonds are rated as AA.

Bond 1 Issued on February 1st, 2017 with an original time maturity of 30 years. It has $1,000 par value and 9% coupon rate. It makes quarterly coupon payments and has a yield to maturity of 9% today.

Bond 2 - Issued on November 1st, 2018 with an original time to maturity of 25 years and a par value of $1,000. It has a coupon rate of 8% and makes semi-annual coupon payments. The price of this bond is 1,112.48 in the market today. This bond is certified as a green bond. Proceeds from this bond are used to reduce the carbon footprint of the company.

Bond 3 - Issued on February 1st, 2017 with an original time maturity of 30 years. It is a zerocoupon bond with a par value of $1,000. The yield to maturity on these bonds is 9.4%.

3. (6 points) Calculate the price of Bond 3 and indicate what type of a bond it is.