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An index-linked bond of 11,000 nominal was issued on 15t July 2016 and it was...

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Accounting

An index-linked bond of 11,000 nominal was issued on 15t July 2016 and it was repaid at 114% on 7st July 2020. Interest on the bond was payable at each anniversary (i.e. in July of each year) at a rate of 5.1% per annum.
An investor liable to income tax at a rate of 31% has purchased the bond at issue and held it to redemption.
Interest and capital payments were indexed by reference to the value of an inflation index with a time lag of 6 months. The value of the inflation indexes at various dates during the term of the loan were as follows:
Inflation indexes for
2016-2020
,2016,2017,2018,2019,2020
January 103.6,109.2,117,123.5,129.3
July 01.8,108.2,112.1,120.5,125.5
Calculate the price paid at issue for the bond, given that the investor has achieved an effective money yield of 6.2% per annum from this investment.
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