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    5))/0.06) = $21.06 Similarly the principal payment at the end of 5 years can be valued as 100/1.065 = $74.73 Therefore the total value of the bond today is $95.79

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    What is the fair price for a bond paying annual coupons at 5% and maturing in 5 years. Assume par value of
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    A. $100.00
    B. $95.79
    C. $104.33
    D. $94.73
    Answer: B
    Explanation:
    Explanation
    The coupon payments can be considered an annuity which can be valued using the formula for the PV of annuities= annuity . Therefore the value of the five coupon payments is 5 * ((1-1/(1.06