Question

In considering the following question:
Consider three bonds with 6.90% coupon rates, all making

annual coupon payments and all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years.

I am working to answer:

a. What will be the price of the 4-year bond if its yield increases to 7.90%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b. What will be the price of the 8-year bond if its yield increases to 7.90%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

c. What will be the price of the 30-year bond if its yield increases to 7.90%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

d. What will be the price of the 4-year bond if its yield decreases to 5.90%? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

I set up the following table to get started:

Price of Each Bond at Different Yields to Maturity

Maturity of Bond

Yield 4 yrs 8 yrs 30 yrs

5.90%

6.90%

7.90%

I think that I am headed in the right direction but am confused on the formulas to fill in my table.

Thank you,

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