Redlands issued 20 year, $1,000 par value term bonds on January 1, 2010. The bonds had an 8% stated rate of interest..
Required:
1. On December 31, 2015 the market rate of interest is 8% on new bonds. What is the current market price if you decide to sell your bonds?
2. On December 31, 2015 the market rate of interest is 10% on new bonds. What is the current market price if you decide to sell your bonds?
3. On December 31, 2015 the market rate of interest is 7% on new bonds. What is the current market price if you decide to sell your bonds?