Present Value of Bond

[FINHELP]

I have a question and an answer, but not sure how to get to the answer.

A 20-year bond promises to pay $60 interest at the end of every six months (or $120 per year). The bond has a par value of $1,000 and its appropriate yield to maturity is 10 percent. What is the present value of the bond?

I have an answer from the book that says $1172.

I was thinking I could use my financial calculator, but I am not getting that exact answer.

 

[Denis]

Precise answer is 1171.59086.....; so 1172 if rounded up.

Are you able to calculate this using formula?
You don't learn much from keypunching a calculator :shock:

 

[FINHELP]

At this point I am having trouble with calculator as well...
I am imputting N=20, I/Y=10, PMT=120, FV= 1000 and getting 1170.27

As far as the formula, I am having trouble with that as well.

I am starting out 60 x PVAIF + 1000 X PVIF

Do I have a good start?? My teacher's thought process is here is the question, here is the answer, now teach yourself ...lol..

 

[Denis]

At this point I am having trouble with calculator as well...
I am imputting N=20, I/Y=10, PMT=120, FV= 1000 and getting 1170.27

Make that: N=40, I/Y=5, PMT=60, FV= 1000
Understand?

 

[FINHELP]

Got it thanks!!!