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I need help on this please. Question 9: One year ago, XYZ Co. issued 20-year bonds...

I need help on this please.

Question 9:

One year ago, XYZ Co. issued 20-year bonds at par. The bonds have a coupon rate of 6.48 percent, paid semiannually, and a face value of $1,000. Today, the market yield on these bonds is 6.8 percent. What is the percentage change in the bond price over the past year? Answer to two decimals

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Answer #1

Par Value of Bond = $1,000

Coupon Rate = 6.48%

Time to maturity = 20 years

Bond Price = $1,000

After 1 year,

Time to Maturity = 9 years

Calculating Bond Present Value,

Using TVM Calculation,

PV = [FV = 1000, T = 38, PMT = 32.40, I = 0.068/2]

PV = $966.15

Change in Price of Bond = (966.15 - 1000)/1000

Change in Price of Bond =-3.39%

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