Answer:
a) 1,277 dollars
Step-by-step explanation:
We have to solve for the present value of the coupon payment and maturity art the end of the bond life discounted at 6% annual rate:
Coupon payment
Coupon payment: 1,000 x 8% / 2 = 40
time 30 years x 2 = 60
market rate = 6% / 2 = 0.03
PV $1,107.0225
Maturity
Maturity 1,000.00
time 60.00
rate 0.03
PV 169.73
PV coupon $1,107.0225
PV maturity $ 169.7331
Total $1,276.7556