On August 1, 2016 you sell 10 million worth of bonds. Each bond sold for $1,000 (face/maturity face) has a 20 year maturity, and a coupon of 7%. Two months pass, and you have no luck. Similar rated bonds are selling for $1,000 but come with a 5% coupon. With all that said, what would be the price on a 7% coupon bond NOW in the Secondary Market?

Lets say that the Interest rate stayed at 7% and they are there for 5 years. What would be the value of the bond in 2018?