Solved: What is the price of each of the two payment streams, Finance Basics

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What is the price of each of the two payment streams

Problem:

You are a financial engineer for a major bank who has created a strip bond by selling the coupon payments of an 8% coupon bond with a 9.5% yield to maturity separately from the par value payment at maturity (coupon payments are made semi-annually).

If there are 12 years left to maturity and the par value is $1000, what is the price of each of the two payment streams?

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Finance Basics: What is the price of each of the two payment streams

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