Answer: $800,178.79
Explanation:
This is a semi-annual coupon bond so convert rate and period to semi annual rates.
Coupon payment = 3% * 1,000,000 * 1/2 years
= $15,000
YTM = 11%/2 = 5.5%
Number of periods = 3 years * 2 = 6 semi annual periods
Value of Bond = Present value of coupon payments + Present value of par
= 15,000 * ( 1 - ( 1 + 5.5%)⁻⁶) / 5.5%) + 1,000,000 / (1 + 5.5%)⁶
= 74,932.9546296555 + 725,245.8330245964
= $800,178.79
