Applebee sold an issue of 30-year, $1,000 par value bonds to the public. The coupon rate of 8.75% is

payable annually. It is now five years later, and the current market rate of interest is 7.25%. What is the

current market price (intrinsic value) of the bonds? Round off to the nearest $1.

A) $715

B) $1,171

C) $1,225

D) $697