An investor is considering the purchase of a 20-year 7% coupon bond selling for $816 and a par value of $1,000. The yield to maturity for this bond is 9%. Assume the investors horizon is 15 years. Market participants expect the yield rate for comparable issues to be 10% for the first 10 years and 6% for years 11 to 20. (ASSUMED SEMIANNUAL PAYMENTS)

a. What is the projected sale price at the end of year 15?

b. What is total coupon payments plus the interest on interest at the end of year 15? (Note, there are two different yield rates for this period. Also, note when you find the value of total coupon payments plus the interest on interest for each of the sub-periods you can't simply add them up if they are located in different points of time.)

c. What is the ANNUALIZED total return in percentage?