A $1000 14-year zero coupon bond sells at a price P to earn 4% effective. If the interest rate increases to 4.28%, let P1 be the new price of this bond and P2 be an estimate of the new price of this bond using the first-order modified approximation. Find P1P2.

Possible Answers

A

.15

B

.29

C

.35

D

.43

E

.50