Answer:
The price of the bond in year's time is $117.81
Explanation:
In calculating the value in a year's time I used the financial function present value in excel
The inputs required are:
rate=yield=6.7%
interest on par value at 8.7%=100*8.7%=8.7
Face value=$100
Number of years is 14years(15-1), it is assumed that calculation is done a year from now.
The formula for present value in excel =PV(rate,nper,pmt,(fv),(type))
By slotting the variables as above, the pv is $117.81 as found in the attached
