# Bond Fair Value

Im trying to learn bond valuations and working out problems I find online, but I come up with the wrong answer for this one.

Im buying a four year coupon bond for 963.54. The coupon is 5.172% paid quarterly. The bond is offered to me at the beginning of the 10th quarter. Im using a discount rate of 6.9%. I calculate sum the future values

(12.93)/(1.01725)^1 + (12.93)/(1.01725)^2 + ... + (12.93+1000)/(1.01725)^6 = 975.5756342

the answer is 977.97 without much explanation.

Can anyone see what I did wrong?

• Your calculation is full of errors, for ex. how can there be 6 terms when the bond is a 4 year bond with quarterly coupons (should be 16 terms, no?). Dec 5, 2017 at 15:08
• There i missed some information in the problem statement. I am offered the bond at the start of Q10. So the bond has 6 payments I will receive. I think my issue is like what @vanguard2k has stated below. But, I have not had a chance to study it again. I will look again this evening.
– ARs
Dec 5, 2017 at 18:50
• I updated the question. its now stated correctly.
– ARs
Dec 5, 2017 at 18:55