28. XYZ Company issued bonds ten years ago at $1,000 PAR value. These bonds had a 20 year life when issued and the annual interest payment was then 10%. This return was in line with the required returns on the bondholders that that point as described below:

Real rate of return 2%

Inflation premium 5%

Risk premium 3%

Total return 10%

Assume that five years late the inflation premium is only 4% and is appropriately reflected in the required return (or yield to maturity) of the bonds. The bonds have 15 years until maturity. Compute the new price of the bond.