Answer:
$1,235.47
Explanation:
For computing the price of the bond, we have to applied the present value formula which is to be shown in the attachment below:
Given that,
Future value = $1,000
Rate of interest = 5% ÷ 2 = 2.5%
NPER = 15 years × 2 = 30 years
PMT = $1,000 × 7.25% ÷ 2 = $36.25
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
Now applying this formula in the spreadsheet, so the price of the bond is $1,235.47 would come
