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.

a. What will be the sale price of the bond at the end of 15 years?

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.

c. What is the annualized total return in percentage?