Problem:
A 15 year bond issued today by Carris, Inc. has a coupon rate of 7%, a required return of 5% and a face value of $1000. The bond will be sold 4 years from now when interest rates will be 8%.
Required:
Question: What is the ending value of the bond when it is sold (to the nearest dollar)?
A.$1027
B.$854
C.$1,000
D.$929
Note: Please explain comprehensively and give step by step solution.