Katie Pairy Fruits Incorporated has a $1,400 15-year bond outstanding with a nominal yield of 15 percent (coupon equals 15% $1,400 = $210 per year). Assume that the current market required interest rate on similar bonds is now only 12 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Compute the current price of the bond.

Find the present value of 3 percent $1,400 (or $42) for 15 years at 12 percent. The $42 is assumed to be an annual payment. Add this value to $1,400.