Present Value of a Bond Using DCF

Consider a bond that pays semi-annual coupons of $50, has a face value of $1,000, and matures in 5 years. If the market interest rate is currently at 6% per annum, what is the present value of this bond to an investor?

To calculate the present value using discounted cash flows (DCF), you will need to discount each of the cash flows from the bond, including the coupon payments and the repayment of the face value upon maturity, back to the present using the market interest rate.

Given that the coupons are paid twice a year, the equivalent semi-annual market interest rate is 3% (6%/2).