A $1,000 bond had a coupon rate of 4.90% with interest paid semi-annually. Caitlin purchased this bond when there were 8 years left to maturity and when the market interest rate was 7.50% compounded semi-annually. She held the bond for 3 years, then sold it when the market interest rate was 3.20% compounded semi-annually.

a. Calculate the purchase price of the bond.

$838.74

$554.87

$290.82

$845.69

b. Calculate Caitlin's selling price.

$893.23

$853.22

$1,077.97

$224.75

c. Calculate her gain or loss on this investment.

-$66.07

$232.28

$298.35

$54.49