Problem 13-02 3. A $1,000 bond has a 8.5 percent coupon and matures after ten years. If current interest rates are 12 percent, what should be the price of the bond Assume that the bond pays interest annually. Use Appender Band Appendix D to answer the question. Round your answer to the nearest dollar 5 b. It after five years interest rates are still 12 percent, what should be the price of the bond? Use Appendix. B and Apendix D to answer the question. Assume that the bord pays interest annually. Round your answer to the nearest dollar $ c. Even though interest rates did not change in a and , why did the price of the bond change? The price of the bond with the longer term is select than the price of the bond with the shorter term as the investors will collect the select interest payments and receive the principal within a longer period of time, d. Change the interest rate in a and to 6 percent and rework your answers. Assume that the bond pays interest analy. Round your answers to the nearest dollar Price of the bond ten years to maturity Price of the bond (five years to maturity: 5 Even though the interest rate is 6 percent in both calculations, why are the bond prices diferent? The price of the bond with the longer term is Select than the price of the bond with the shorter term as the investors we collect the best interest payments for a longer period of time