A company has $1,000 par value bonds outstanding at 8 percent interest. The bonds will mature in 25 years. Compute the current price of the bonds if the present yield to maturity is 7%.

Par value is $1000
Coupon rate is 8 % that is 8% on 1000= $80
Maturity period is 25 years
Yield to maturity is 7%, which is nothing but the interest rate by which the present values of all the future cash flows are equal to the bond's price.

Hence bond price is equal to

80*__1-1/(1+7%)^25________ + 1000*1/(1+7%)^25
7%