If you purchase a $$1,000$ face value, $4\%$ annual coupon bond with $6$ years to maturity when the going interest rate $($or yield$)$ is $3\%,$ then you would pay $$1,054\mathrm{.}17$ for the bond. Suppose that you sell it a year later at which time the going interest rate has pisen to $3\mathrm{.}5\%.$ What is your rate of return on the bond?