Face Value = $1,000
Annual Coupon Rate = 8.00%
Annual Coupon = 8.00% * $1,000
Annual Coupon = $80
Time to Maturity = 5 years
Annual YTM = 3.00%
Value of Bond = $80 * PVA of $1 (3.00%, 5) + $1,000 * PV of $1
(3.00%, 5)
Value of Bond = $80 * (1 - (1/1.03)^5) / 0.03 + $1,000 *
(1/1.03)^5
Value of Bond = $80 * 4.579707 + $1,000 * 0.862609
Value of Bond = $1,228.99
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