Calculate the current price

Reference no: EM13200721

The current term-structure of spot interest rates for safe zero-coupon bonds is as follows:
Maturity, in years
Interest rate(r)
1 8%
2 10%
3 11%
4 12%
5 13%
There is a safe bond B which has 4 years before maturity and pays a coupon of 12% at regular annual intervals and a face value of $100 at maturity.

(a) What will be the current price of bond B?

Reference no: EM13200721

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