Can someone show me how to solve for Bond C of this question? I don\'t understan

Question

Can someone show me how to solve for Bond C of this question? I don't understand how people have arrived to the answer to this question in similar postings.

Question: An investor has two bonds in her portfolio, Bond C and Bond Z. each bond matures in 4 years, has a face value of $1,000, and has a yield to maturity of 9.6%. Bond C pays a 10% annual coupon, while Bond Z is a zero coupon bond. A. Assuming that the yield to maturity of each bond remains at 9.6% over the next 4 years, calculate the price of the bonds at each of the following years to maturity:

Year

0

1

2

3

4

Explanation / Answer

Bond c

Interest = 10%,

price of bond =present value of ( interest + maturity value )

pvf@ 9.6%

Years Amount

pvf@ 9.6%

Present value 0 1000 1 1000 1 100 + 1000 .912 1003.2 2 100 + 100 + 1000 .832 100 × .912 +100 ×.832+ 1000 ×.832 = 1006.4 3 100 + 100 + 100 +1000 .759 100× .912 + 100 ×.832 +100 ×..759 + 1000 ×.759 = 1009.3 4 100 + 100 + 100 +100 +1000 .693 100 ×.912 + 100 ×.832 + 100 × .759 + 100 ×.693 + 1000 ×.693 = 1012.6

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