The price of a bond will be determined for any given interest rate, duration and face amount at maturity.

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Originally Posted by bfreed36

The price of a bond will be determined for any given interest rate, duration and face amount at maturity.

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Provide examples.

You'll need an annuity like sum for the interest payments and then discount the principle payment. Add the two and you've priced your bond. You could use a financial calculator or excel's bond functions if you're doing more than one.

an example:

In September 2009, I bought a government bond which will mature in August 2013 and pay an annual coupon rate of 6 percent. The bond, which has a face value of 1,000 and pays interest every six months, offers a yield of 4 percent a year.

What was the price of bond that I bought in September 2009?