Would someone be able to help me understand if I am doing this calculation for some homework correctly? I know I could do it on my calculator, but I'm trying to understand the process behind it as well.
A 12 year, 7.1%, $1,000 bond that pays interest semiannually is presently selling with an Yield-to-maturity (YTM) of 5.7%. What is the price of the bond, and what kind of bond is this?
= (35.5/1.0285) + (35.5/1.0285^2) + (35.5/1.0285^3) + (35.5/1.0285^4) + (35.5/1.0285^5) + (35.5/1.0285^6) + (35.5/1.0285^7) + (35.5/1.0285^8) + (35.5/1.0285^9) + (35.5/1.0285^10) + (35.5/1.0285^11) + (1035.5/1.0285^1212)
Premium bond: Sells above face value (YTM < Coupon Rate on the bond)