The demand curve and supply curve are estimated to be the same as in problem 4. Following a dramatic increase in the value of the stock market, many retirees started moving money out of the stock market and into bonds. This resulted in a parallel shift in the demand for bonds, such that the price of bonds at all quantities increased $50. Assuming no change in the supply equation for bonds, what is the new equilibrium price and quantity? What is the new market interest rate?

Data From Problem 4

A bond issued by Toyota has 30 years to maturity with a face value of $1,000. The market's required yield to maturity for a similarly rated debt was 8.5% per annum. The coupon rate is 10.5%. Toyota pays interest to bondholders on a semiannual basis on January, 15 and July, 15. Calculate the price of the bond.: 

a. In the following month, due to an unexpected economic downturn, the required yield to maturity for a similarly rated debt decreased to 5%. Calculate the current price of the bond.
b. Should the maturity increase to 35 years, calculate the price of the bond.