My company has $1000 par value bonds outstanding at 8% interest. The bonds will mature in 25 years. How do I compute the current price of the bonds if the present yield to maturity is 7%?

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Par value=1000, coupon rate8% that is 80,YTM or required rate of return 7%,number of years for maturity=25 years

current price=findthe value of80,annuity for 25 years at YTM at 7%, that is presentvalue of an annuity.
Then add the answer to 1000/(1+0.07)^25.this is your answer.

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