Charlotte's Clothing issued a 7 percent bond with a maturity date of 16 years. Six years have passed and the bond is selling for $870. Assume that the bond pays interest annually. a. What is the current yield? Round your answer to two decimal places. % b. What is the yield to maturity? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest whole number. % c. If four years later the yield to maturity is 9 percent, what will be the price of the bond? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. Interest Factors for the Present Value of an Annuity of One Dollar a I1 10.3689.7879.2538.7608.3067.8877.4997.1396.8056.4955.9885.4535.0294.6564.3273.7763.3352.9782.683 1513.86512.84911.93811.11810.3809.7129.1088.5598.0607.6066.8116.1425.5755.0924.6754.0013.4833.0762.750 1614.71813.57812.56111.65210.83810.1069.44$8.8518.3127.8246.9746.2655.6695.1624.7304.0033.5033.0882.758 2522.02319.52317.41315.62214.09412.78311.65410.6759.8239.0777.8436.8736.0975.4674.9484.1473.5643.1222.776 3025.80822.93719.60017.29215.37313.76512.40911.25810.2749.4278.0557.0036.1775.5174.9794.1603.5693.1242.77 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \begin{tabular}{l} Time \\ Period \\ (e.g. \\ year) \end{tabular} & 1% & 28 & 3% & 4% & 5% & 6% & 7% & 8% & 9% & 10% & 12% & 14% & 15% & 15% & 18% & 20% & 24% & 28% \\ \hline 1 & 990 & .980 & 971 & 962 & 952 & 943 & .935 & .926 & 917 & 909 & .893 & .877 & .870 & .862 & .847 & .833 & .806 & .781 \\ \hline 2 & .980 & .961 & .943 & 925 & 907 & .890 & .873 & .857 & .842 & .826 & .797 & .769 & .756 & .743 & 718 & .694 & .650 & .610 \\ \hline 3 & 971 & 942 & 915 & .889 & 864 & 840 & .816 & .794 & .772 & .751 & .712 & .675 & .658 & 641 & 609 & .579 & 524 & .477 \\ \hline 4 & 961 & 924 & .889 & .855 & 823 & .792 & .763 & .735 & .708 & .683 & .636 & .592 & .572 & .552 & .516 & .482 & .423 & .373 \\ \hline 5 & .951 & 906 & 863 & 822 & .784 & .747 & .713 & .681 & .650 & .621 & .567 & .519 & .497 & .476 & .437 & .402 & .341 & .291 \\ \hline 6 & 942 & .888 & .838 & .790 & .746 & 705 & .666 & .630 & .596 & .564 & .507 & .456 & .432 & .410 & 370 & .335 & .275 & .227 \\ \hline 7 & 933 & .871 & 813 & .760 & 711 & .665 & .623 & .583 & 547 & .513 & .452 & .400 & .376 & .354 & .314 & .279 & .222 & .178 \\ \hline 8 & 923 & .853 & .789 & .731 & 677 & .627 & .582 & .540 & .502 & .467 & 404 & .351 & .327 & .305 & .266 & .233 & .179 & .139 \\ \hline 9 & .914 & .837 & .766 & .703 & .645 & 592 & .544 & .500 & .460 & .424 & 361 & .308 & .284 & .263 & .226 & .194 & .144 & .108 \\ \hline 10. & 905 & .820 & .744 & .676 & .614 & .558 & .508 & .463 & .422 & \begin{tabular}{r} 386 \\ 9 \end{tabular} & .322 & .270 & .247 & 227 & 191 & .162 & .116 & .085 \\ \hline 11 & .896 & 804 & .722 & .650 & .585 & .527 & .475 & .429 & .388 & .350 & .287 & .237 & .215 & .195 & .162 & .135 & .094 & .066 \\ \hline 12 & .887 & .788 & .701 & .625 & .557 & .497 & .444 & .397 & .356 & .319 & .257 & .208 & .187 & .168 & .137 & .112 & .076 & .052 \\ \hline 13 & .879 & .773 & .681 & .601 & .530 & .469 & .415 & .368 & .326 & .290 & .229 & .182 & .163 & .145 & .116 & .093 & .061 & .040 \\ \hline 14 & .870 & .758 & 661 & .577 & .505 & .442 & 388 & 340 & .299 & .263 & .205 & .160 & .141 & .125 & .099 & .078 & .049 & .032 \\ \hline 15 & .861 & .743 & .642 & .555 & .481 & .417 & 362 & .315 & .275 & .239 & .183 & .140 & .123 & .108 & .084 & .065 & .040 & .025 \\ \hline 16 & .853 & .728 & .623 & .534 & .458 & .394 & .339 & .292 & .252 & .218 & .163 & .123 & .107 & .093 & .071 & .054 & .032 & .019 \\ \hline 17 & 844 & .714 & .605 & .513 & .436 & 371 & .317 & .270 & .231 & .198 & .146 & .108 & .093 & .080 & .060 & .045 & .026 & .015 \\ \hline 18 & 836 & .700 & .587 & .494 & .416 & 350 & .296 & 250 & .212 & .180 & .130 & .095 & .081 & .069 & .051 & .038 & .021 & .012 \\ \hline 19 & .828 & .686 & .570 & 475 & .396 & .331 & 276 & 232 & .194 & .164 & .116 & .083 & .070 & .060 & .043 & .031 & 017 & .009 \\ \hline 20 & .820 & .673 & .554 & 456 & 377 & 312 & 258 & .215 & .178 & .149 & .104 & .073 & .061 & .051 & .037 & .026 & .014 & .007 \\ \hline 25 & 780 & .610 & .478 & .375 & .295 & 233 & .184 & .146 & .116 & .092 & 059 & .038 & .030 & .024 & .016 & .010 & .005 & .002 \\ \hline 30 & .742 & .552 & .412 & 308 & 231 & .174 & .131 & .099 & .075 & .057 & .033 & .020 & .015 & .012 & .007 & .004 & .002 & .001 \\ \hline \end{tabular}
