3. A man is considering to buy a 20-year corporate bond. The bond has a face value of $1,000 and pays 6% interest per year in two semi-annual payments and in addition he will receive $1,000 at the end...

Extracted text: 3. A man is considering to buy a 20-year corporate bond. The bond has a face value of $1,000 and pays 6% interest per year in two semi-annual payments and in addition he will receive $1,000 at the end of 20 years, along with the last interest payment. If the investor believes he should receive 8% annual interest, compounded semi-annually, what will be the amount he is willing to pay for the bond?