Problem $10-15($Algo$)$ Effect of yield to maturity on bond price $[$LO$10-2,10-3]$

Media Bias Incorporated issued bonds $10$ years ago at $$1,000$ per bond. These bonds had a $30-$year life when issued and the annual

interest payment was then $15$ percent. This return was in line with the required returns by bondholders at that point in time as

described below:

Assume that $10$ years later, due to good publicity, the risk premium is now $2$ percent and is appropriately reflected in the required

return $($or yield to maturity$)$ of the bonds. The bonds have $20$ years remaining until maturity.

Compute the new price of the bond. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using

the formula and financial calculator methods.

Note: Do not round intermediate calculations. Round your final answer to $2$ decimal places. Assume interest payments are annual.