Miller Corporation has a premium bond making semiannual payments. The bond has a coupon rate of 8 percent, a YTM of 6 percent, and 12 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond has a coupon rate of 6 percent, a YTM of 8 percent, and also has 12 years to maturity. Both bonds have a par value of $1,000. What is the price of each bond today?

If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 3 years? In 7 years? In 11 years? In 12 years?