Describe how you set up the calculations. Explain why the change in interest rates changed the price of the bond.

You are considering writing a bond for $20$ years and paying annual interest of $6\%$ of the face $($par value$)$ of $$1,000.$ Interest rates are $6\%$ when issued. What is the market value of this bond once you write it$?$

Overnight the market rate for similar bonds falls to $5\%.$ What is the new market value of the bond?