Fair Value Calculation of a Bond

XYZ Corporation is issuing a bond with a face value of $1,000, a coupon rate of 6%, and a maturity of 5 years. The bond pays interest annually. An investor wants to calculate the fair value of this bond using the discounted cash flow method. If the market interest rate for similar bonds is currently 4%, what is the fair value of this bond?

To calculate the fair value, the investor needs to compute the present value of each cash flow, which includes the annual coupon payments and the face value at maturity.