Problem $3$

You are given two twenty$-$year annual coupon par value bonds.

Bond A: Has a face value of $$1,000,$ coupon rate of $10\%$ and was purchased to yield $8\%$

Bond B: Has a coupon rate of $6\%$ and was purchased to yield $8\%$ as well.

In year $10$ the absolute value of the change in principal is the same for each bond.

Find the price of Bond $B.$

Bond Price Adjustment Formulas

$I_t=iC*(1+(g-i)a_{a-t+1|,i})$

$P_t=C(g-i)v^{n-t+1}$