Ok, I've been looking at this stupid bonds problem for the past hour, and I can't figure out how the book is coming up w/ these figures. Say you have a $100,000 5 yr. bond w/ a contract rate of 8%, but the market rate is 10%. Therefore the bond has to sell at a discount. Now the book is saying the price is $97,277. My question is, HOW THE HELL did they come up w/ that number? Same thing goes for this premium question. $100k 5 yr. bond w/ a contract of 12%, but the market rate is 10%. The book says the issue price for these bonds is $107,720. How in gods name did they come up w/ these #'s? Nowhere did the book explain how to determine issue prices to account for the different b/t market & contract rates.