Jim Busby calls his broker to inquire about purchasing a bond of Disk Storage Systems. His broker quotes a price of $$1,100.$ Jim is concerned that the bond might be overpriced based on the facts involved. The $$1,000$ par value bond pays $10$ percent interest, and it has $15$ years remaining until maturity. The current yield to maturity on similar bonds is $8$ percent.

a$.$ Calculate the new price of the bond. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Note: Do not round intermediate calculations. Round your final answer to $2$ decimal places. Assume interest payments are annual.

New price of the bond

b$.$ Do you think the bond is overpriced?

No

Yesb