26, Bonds: Six years ago (Jan 1, 2013), DePaul University issued $10 million of 10-year debt at 6% to build a new dormitory on the Lincoln Park campus. The bonds are due in four years (2022) and the payments (interest and principal) are illustrated below. Your favorite rich aunt (Nancy) is considering purchasing the notes and asks you how much you think she should pay for them. The prevailing market rate has now fallen to 3.0% and Nancy is thinking 6% sounds great! She wants to buy all $10 million. You tell her that bonds have two cash flow streams (interest and principal) which you show her with the timeline below. Tell Nancy how much you think she will have to pay to buy the bonds in the open market given that the prevailing market rate is now only 3.0% (what is the value of these bonds?). (7 points) 12/31 12/31 12/31 12/31 12/31 12/31 12/3112/31 12/31 12/31 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $600,000 $600,000 $600,000 $600,000 These Interest Payment Have Already Been Paid 10,000,000 Principal is paid at maturity