Answer:
Current bond price = 80 / (1+0.04)^1 + 1080 / (1+0.04)^2
Explanation:
The Coupon payment = 0.08 * 1000 = 80
The Payment at EOY 1 = 80
The Payment at EOY 2 = 80 + 1000 = 1080
market interest rate = 4%
Current bond price = 80 / (1+0.04)^1 + 1080 / (1+0.04)^2