Not sure how to find the invoice price for a bond. Any help? You purchase a bond

Question

Not sure how to find the invoice price for a bond. Any help?

You purchase a bond with a coupon rate of 7.8 percent, semiannual coupons, and a clean price of $900.    
    

If the next coupon payment is due in three months, what is the invoice price? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

If the next coupon payment is due in three months, what is the invoice price? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Your "invoice price" is your clean price of $900 plus accrued interest (2*(30/360)* 0.078*1,000) or $13 . You need to know bonds pay interest semi-annually or every 6 months, so if the next coupon payment is due in 3 months, then you have 3 months of accrued interest. Also, bonds convention uses each month of 30-days for a 360-day year. The coupon is 7.8% or $78 per annum or $35.1 per semi-annual payment and 3/6th or 1/2 of $35.1 is $17.55.

The invoice price is $900 plus $17.55 = $917.55

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