Jackson Corporation's bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 8%. The bonds have a yield to maturity of 9%. What is the current market price of these bonds?

Answer:

P = F*r*[1 -(1+i)^-n]/i + C*(1+i)^-n, with

F = par value
C = maturity value
r = coupon rate per coupon payment period
i = effective interest rate per coupon payment period
n = number of coupon payments remaining

We have F = 1000.
C assumes to be the same as par value = 1000 since it's not given.
r = .08
i = .09
n = 12
Plug in
P = 1000*.08 * (1 - 1.09^-12)/.09 + 1000*1.09^-12 = $928.39