Consider a callable bond with annual coupons a face value of $1000 and a 20yr term. The coupon rate is an annual rate of 7% the yield rate is annual rate of
7.25%. The bond may be called at any coupon date (after coupon payment has been made) at times t=14 through t=20. If the bond is called at t=14 15 or 16 the
redemption value is $970. If the bond is called at t= 17 or 18 the redemption values is $995. If the bond is called at t= 19 or 20 the redemption value is
$1000. The price of the bond is set to be the minimum price from the various redemption scenarios. Find the price of the bond.