6. Consider two bonds, one with five years to maturity and the other with 20 years to...

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6. Consider two bonds, one with five years to maturity and the other with 20 years to maturity. Both have $1,000 face values and 8% coupon rates (with annual interest payments), and both sell at par. Assume that the yields of both bonds fall to 6%. Calculate the dollar increases in the bonds' prices. What percentage of this increase in each case comes from a change in the present value of the bonds'

principals, and what percentage comes from a change in the present value of the bonds' interest payments?

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