Assume that you wish to purchase a bond with a 30-year maturity, an annual coupon rate of 10 percent, a face value of $1,000, and semiannual interest payments. If you require a 9 percent yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?
Using the financial calculator the answer is: $1,103.19
Inputs: N = 60; I =4.5; PMT = 50; FV = 1,000