Drew Jefferson purchases a new $20,000 9% twelve-year bond with semiannual coupons. If held to maturity, the redemption payment is $18,500, and the bond would yield Mr. Jefferson 8% convertible semiannually. The bond has an American option and is callable beginning at three years from issue. If the bond is called at time T, where T is measured in coupon periods, the call premium is p(T). Find an expression for the amount p(T) so that Mr. Jefferson's yield is 8% no mater when the bond is called.
Please show all steps and use formulas. NO EXCEL