Johnson Motors’ bonds have 0 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon rate is 8 percent. The bonds have a yield to maturity of 9 percent. What is the current market price of these bonds?

To calculate the current market price of the bonds, we can use the present value formula. The formula is:

PV = C/(1+r) + C/(1+r)^2 + C/(1+r)^3 + ... + C/(1+r)^n + M/(1+r)^n

Where:
PV = Present Value (current market price)
C = Annual Coupon Payment
r = Yield to Maturity (expressed as a decimal)
n = Number of years remaining to maturity
M = Par Value

In this case, the annual coupon payment is 8% of $1,000, so C = 0.08 * $1,000 = $80.
The yield to maturity is given as 9%, so r = 0.09.
The number of years remaining to maturity is 0, so n = 0.
And the par value is $1,000, so M = $1,000.

Plugging these values into the present value formula, we get:

PV = $80/(1+0.09)^0 + $80/(1+0.09)^0 + $80/(1+0.09)^0 + ... + $80/(1+0.09)^0 + $1,000/(1+0.09)^0
= $80 + $80 + $80 + ... + $80 + $1,000
= 20 * $80 + $1,000
= $1,600 + $1,000
= $2,600

Therefore, the current market price of the bonds is $2,600.

To calculate the current market price of these bonds, you can use the formula for present value of a bond. The present value of a bond is the sum of the present value of its future cash flows, which include the periodic coupon payments and the repayment of the par value.

In this case, since the bonds have 0 years remaining to maturity and interest is paid annually, there will be only one coupon payment left, which is equal to the coupon rate (8 percent) multiplied by the par value ($1,000). Therefore, the future cash flow is $80 (0.08 * 1000).

To calculate the present value of this cash flow, you need to discount it at the yield to maturity (9 percent). The present value of the cash flow can be calculated using the formula:

Present Value = Future Cash Flow / (1 + Yield to Maturity)^n

Where n is the number of years remaining to maturity.

In this case, n is 0 because the bonds have 0 years remaining to maturity. Therefore, the present value of the cash flow is:

Present Value = $80 / (1 + 0.09)^0 = $80

Since there is only one cash flow and it is equal to the present value, the current market price of these bonds is $80.