A 1,000 dollar par value bond was issued 25 years ago at a 8 percent coupon rate. It currently has 10 years remaining to maturity. Interest rates on similar debt obligations are now 10 percent.

a) Compute the current price of the bond using an assumption of semiannual payment. (Round your answer to 2 decimal places.)

b) If Mr. Robinson intially bought the bond at par value, what is his percentage loss (or gain)? (Round your answer to 2 decimal places.)

c) Now assume Mrs. Pinson buys the bond at its current market value and holds it to maturity, what will her percentage return be? (Round your answer to 2 decimal places.)

d) Although the same dollar amounts are involved in part b and c, why the percentage gain is larger than the percentage loss.

either the investment is smaller or larger