Fundamentals of Engineering Economics 3rd Edition by Chan Park

Exercise 5

Mr. Smith wishes to sell a bond that has a face value of $1,000. The bond bears an interest rate (coupon rate) of 7.5%, with bond interest payable semiannually. Four years ago, the bond was purchased at $900. At least a 9% annual return (APR) on the investment is desired. What must be the minimum selling price now for the bond in order for Mr. Smith to make the desired return on the investment after making eight interest payments?