Exactly four years ago, AAA Corporation issued 20-year bonds with a $1,000 face

Question

Exactly four years ago, AAA Corporation issued 20-year bonds with a $1,000 face value. These bonds pay $65 in coupon payment every six months. The bonds currently sell for $1,020. Due to additional financing needs, the firm has decided to issue new bonds that will have a maturity of 15 years, a par value of $1,000, and pay $40 in interest every six months. If both bonds have the same yield (market interest rate), how many new bonds must AAA issue to raise $4,000,000 cash?

Can someone help me please and show stps that would be greatly appreciated.

Explanation / Answer

Face Value $1,000 Interest rate 4% Time 30 Semi annual Coupon Rate $40 NPER -$22 Bond Value -$1,333.33 Number of bonds 3,000

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