Wendy and Amanda Kendrick purchase bonds on the same day. Both bonds have a yield of 6% and a face value of $10,000.

(a)If Wendy's bond is a 9% bond with 15 years to maturity, then how much does she pay for it?

(b)If Amanda's bond has 10 years to maturity and she pays $11,487.75 for it, then what is the coupon rate?

ANSWER:

(a) $12,940.07

(b) 0.08 = 8%

If possible provide steps and equations used to solve this kind of equations.