Lance Whittingham IV specializes in buying deep discount bonds. These represent bonds that are trading at well below par value. He has his eye on a bond issued by the Leisure Time Corporation. The $1,000 par value bond with semiannual payments has 4 percent annual interest and has 10 years remaining to maturity. The current yield to maturity on similar bonds is 12 percent.(Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answers to 2 decimal places.)

a.What is the current price of the bonds? UseAppendix BandAppendix D.

Current price$

b.By what percent will the price of the bonds increase between now and maturity?

Price increases by%

c.What is the annual compound rate of growth in the value of the bonds? (UseAppendix A)

Annual compound rate%