For fixed-rate bonds it's important to realize that the value of the bond has a(n) relationship to the level interest rates. If interest rates rise, then the value of the bond however, if interest rates fall, then the value of the bond A bond is one that sells below its par value. This situation occurs whenever the going rate of interest is above the coupon rate. Over time its value will approaching its maturity value at maturity. A bond is one that sells above its par value. This bond situation occurs whenever the going rate of interest is below the coupon rate. Over time its value will approaching its maturity value at maturity. A par value bond is one that sells at par; the bond's coupon rate is equal to the going rate of interest. Normally, the coupon rate is set at the going market rate the day a bond is issued so it sells at par initially. Quantitative Problem: Potter Industries has a bond issue outstanding with coupon of 6% and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 8.8%, what is the value of the bond? Round your answer to the nearest cent. Do not round intermediate calculations. $ Quantitative Problem: Potter Industries has a bond issue outstanding with a 6% coupon rate with semiannual payments of $30, and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 8.8%, what is the value of the bond? Round your answer to the nearest cent. Do not round intermediate calculations. $