A $1,000 par value bond was issued 20 years ago at a 12 percent coupon rate. It currently has 15 years remaining to maturity. Interestrates on similar obligations are now 10 percent. Assume Ms. Bright bought the bond three years ago when it had a price of $1,020Further assume Ms. Bright paid 25 percent of the purchase price in cash and borrowed the rest (known as buying on margin). Sheused the interest payments from the bond to cover the interest costs on the loan.a. What is the current price of the bond? Use Table 16-2. (Input your answer to 2 decimal places.)Price of the bondb. What is her dollar profit based on the bond's current price? (Do not round intermediate calculations and round your answer to 2decimal places.)Dollar profitc. How much of the purchase price of $1,020 did Ms. Bright pay in cash? Do not round intermediate calculations and round youranswer to 2 decimal places.)Purchase price paid in cash$255.00d. What is Ms. Bright's percentage return on her cash investment? Divide the answer to part b by the answer to part c. (Do not roundIntermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Table 16-2 Interest rates and bond prices (face value is $1,000 and annualcoupon rate is 12%)B234567ACDRate in the Market (%)-Annual Yield to Maturity*8%10%12%14%$1,037.72$1,018.59 $1,000.00 $981.92$1,345.84$1,153.72$1,429.64 $1,182.56Years to Maturity1152516%$964.33$1,000.00 $875.91 $774.84$1,000.00 $861.99$755.33G=+PV(F2/2,A5*2,-120/2,-1000)+PV(rate,nper,pmt [fv])

Bond price refers to the present value of the future payments in a discounted form that reflects the…

A $1,000 par value bond was issued 20 years ago at a 12 percent coupon rate. It currently has 15 years remaining to maturity. Im rates on similar obligations are now 10 percent. Assume Ms. Bright bought the bond three years ago when it had a price of $1,0 Further assume Ms. Bright paid 25 percent of the purchase price in cash and borrowed the rest (known as buying on margin). S used the interest payments from the bond to cover the interest costs on the loan. a. What is the current price of the bond? Use Table 16-2. (Input your answer to 2 decimal places.) Price of the bond b. What is her dollar profit based on the bond's current price? (Do not round intermediate calculations and round your answer decimal places.) Dollar profit