Suppose you purchase a $10-$year, $3\mathrm{.}5\%$ coupon $($paid quarterly$)$ bond with a yield to maturity of $5\%$ and a face value of $$1,000.$

What will happen to the price of the bond if interest rates decrease by $1\%?$

It will decrease by $$89\mathrm{.}63$

It will decrease by $$76\mathrm{.}43$

It will increase by $$76\mathrm{.}43$

It will increase by $$89\mathrm{.}63$