Find the current price of the mohsen bond

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Mohsen Inc. 10-year bonds were issued four years ago, at a par value price of $1000. They carry an annual interest rate of 8%, and the interest paid out semi-annually. However, in the time since they were issued, interest rates have fallen such that similar bonds are now being issued with a 6% annual coupon (also paid out semi-annually).

Find the current price of the Mohsen bond, and also tell me if it is currently being sold at a premium or at a discount. Show your calculations.

Reference no: EM132666179

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