Exercise $16\mathrm{.}2$ #$26$

Four and one$-$half years ago Gavin purchased a $$25,000$ bond in a new Province of Ontario issue with a $20-$year maturity and a $6\mathrm{.}1\%$ coupon. If the prevailing market rate is now $7\mathrm{.}1\%$ compounded semiannually:

a$.$ What would be the proceeds from the sale of Gavin's bond? $($Round your answer to the nearest cent.$)$

Proceeds from the sale

$ $.$

b$.$ What would be the capital gain or loss $($expressed as a percentage of the original investment$)?($Round your answer to two decimal places.$)$

There would be a capital $$ of $\%.$

Assume that:

Bond interest is paid semiannually.

The bond was originally issued at its face value.

Bonds are redeemed at their face value at maturity.

Market rates of return are compounded semiannually.