Present Value of a Semiannual Coupon Bond Calculation

An investor is evaluating a bond that pays a semiannual coupon of $40, has a face value of $1,000, and matures in 8 years. The bond's yield to maturity is 5% annually. Calculate the present value of this bond using discounted cash flow analysis.

To facilitate the calculation, note that since the bond pays coupons semiannually, the effective yield per period is 2.5% (5% / 2) and the number of periods is 16 (8 years * 2).