How to calculate the value of a bond that is priced to yield X%
The idea is correct; the details are a little off. You need to apply it to the actual cash flow the bond would create. The best advice I can give you is to draw a time-line diagram. Then you would see that you receive £35 in 6 months, £35 in 12 months, £35 in 18 months, and £1035 in 24 months.  Use  the method you've presented in your question and the interest rate you've calculated, 3% per 6 months, to discount each payment the specified amount, and you're done. PS:  If there were more coupons, say a 20 year quarterly bond, it would speed things up to use the Present Value of an Annuity formula to discount all the coupons in one step...
Below is an instruction that describes a task. Write a response that appropriately completes the request.

### Instruction:
How to calculate the value of a bond that is priced to yield X%

### Response:
The idea is correct; the details are a little off. You need to apply it to the actual cash flow the bond would create. The best advice I can give you is to draw a time-line diagram. Then you would see that you receive £35 in 6 months, £35 in 12 months, £35 in 18 months, and £1035 in 24 months.  Use  the method you've presented in your question and the interest rate you've calculated, 3% per 6 months, to discount each payment the specified amount, and you're done. PS:  If there were more coupons, say a 20 year quarterly bond, it would speed things up to use the Present Value of an Annuity formula to discount all the coupons in one step...