Determine the selling price of a 15-year, 4.725% bond, with $1000 maturity value, with a yield of 4.735%. (Assume twice-yearly interest payments. Round your answer to the nearest cent.)

To determine the selling price of a bond, we need to calculate the present value of the bond's future cash flows, which include both the periodic interest payments and the maturity value.

Firstly, let's calculate the periodic interest payment. The bond has a 4.725% coupon rate, and it makes semi-annual interest payments. To calculate the periodic interest payment, we can multiply the coupon rate by the maturity value and divide it by the number of payments per year (which is 2 for semi-annual payments):

Interest payment = (Coupon rate * Maturity value) / Number of payments per year
= (4.725% * $1000) / 2
= $47.25

So, the interest payment for each period is $47.25.

Next, we need to calculate the present value of these periodic interest payments and the maturity value. To do this, we use the formula for the present value of an annuity:

Present value = (Interest payment / Yield rate) * (1 - (1 / (1 + Yield rate)^n))
Maturity value = Maturity value / (1 + Yield rate)^n

Where:
- Yield rate = 4.735% (yield rate for each period)
- n = number of periods (15 years in this case, so 30 periods)

Calculating the present value of the interest payments:

Present value of interest payments = (Interest payment / Yield rate) * (1 - (1 / (1 + Yield rate)^n))
= ($47.25 / 4.735%) * (1 - (1 / (1 + 4.735%)^30))

Calculating the present value of the maturity value:

Present value of maturity value = Maturity value / (1 + Yield rate)^n
= $1000 / (1 + 4.735%)^30

Finally, we can calculate the selling price by summing the present value of the interest payments and the present value of the maturity value:

Selling price = Present value of interest payments + Present value of maturity value

Round the selling price to the nearest cent to get your final answer.