If a bond pays $75 in interest annually, at what price would it have to sell to have a current yield of 7 percent?

Name: If a bond pays $75 in interest annually, at what price would it have to sell to have a current yield of 7 percent?
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Question

Quizplus · Accepted Answer

The current yield is calculated as annual interest payment divided by the market price of the bond. Let X be the price of the bond. 
0.07 = 75/X 
0.07X = 75 
X = 1071.43
Therefore, the bond would have to sell for $1,071.43 to have a current yield of 7 percent.

If a Bond Pays $75 in Interest Annually, at What