You are considering purchasing a $2,000, 20-year, 8% bond. Interest is paid semi-annually and comparable issues with similar risk are yielding 7%.  If the bond has 12 years until maturity, what is the most you should pay for the bond today?

A) ​$2,161
B) ​$2,214
C) ​$2,000
D) ​$3,445

Semi-Annually

Occurring or calculated twice a year, typically every six months.

Comparable Issues

Securities or financial instruments that are similar in terms of yield, maturity, credit quality, and other characteristics, used for benchmarking.

Yielding

In finance, referring to the income return on an investment, such as the interest or dividends received from holding a particular security.