Answer:
The answer is $881.5
Explanation:
Solution
Given that:
The accrued interest is refers to the payment (coupon) for the time with the fraction of the time that has exceed since the last coupon payment.
Since we have a semiannual coupon bond, the coupon payment for six months is 1/2 of the annual coupon payment.
Three months has exceeded since the last coupon payment.
So the accrued interest for the bond is given below:
Accrued Interest = $86/2 * 3/6
= $21.5
Thus
The price (dirty) = Clean Price + Accrued Interest
= $860 + $21.5
= $881.5
Therefore the invoice price is $881.5
