Answer:
$16,695.11
Explanation:
the price of the bond is equal to the present value of its cash flows:
value of cash flows in year 6 = $1,100 x 12.75523 (PV annuity factor, 16 periods, 2.8%) = $14,030.75
value of cash flows in year 14 = $1,400 x 10.07390 (PV annuity factor, 12 periods, 2.8%) = $14,103.46
present value in year 0 = [$14,030.75 / 1.056⁶] + [$14,103.46 / 1.056¹⁴] = $10,118.06 + $6,577.05 = $16,695.11
