NEED HELP WITH FINDING THE PRICE OF A BOND?

I AM STUCK ON A PROBLEM ALL DAY AND I NEED A LITTLE HELP. I CANNOT FIND THE FORMULA IN THE TEXT AND IM STUCK: AN ANNUAL BOND HAS A FACE VALUE OF $2000 AND ANNUAL COUPON PAYMENT OF 2.5%. ASSUMING THAT BOND HAS A MATURITY OF 10 YEARS AND DISCOUNT RATE IS 10%, FIND THE PRICE OF THE BOND?

To calculate the Price of the bond, we’ll use the following symbols:
(pv1,i,n) = present value of $1 discounted at i%, n periods from the present
(pva,i,n) = present value of an annuity of $1 discounted at i%, for n periods

The price of the bond is $2,000(pv1, 10%,10) + 2.5%($2,000)(pva, 10%, 10)
Using the PV tables below, we get:
Price of the bond = $2,000(0.38554) + 2.5%($2,000)(6.14457)
= $771.08 + $307.23 = $1,078.31

Answer may be slightly different, depending on the no. of decimal points used.

India economics report

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