In 2018, you purchased a 15-year $1,000 corporate bond with a coupon interest rate of 5%. For simplicity, we assume that the interest is paid annually. Also, assume new corporate bond issues of comparable quality are currently paying 4.50 percent.

1. What is the approximate dollar price for which you could sell your bond?
2. In your own words, describe why your bond increased in value.

** DO NOT use excel or financial calculator. Provide your answer with a formula manually.