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Suppose that someone owns a 30-year $21 000 T-bond with a rate of 6%. After 5 years the bond is sold for cash, but interest
Suppose that someone owns a 30-year $21 000 T-bond with a rate of 6%. After 5 years the bond is sold for cash, but interest rates have fallen to 3.5%. (a) How much has the bond paid in total for the first 5 years? (b) How much will the bond pay the person buying it over the next 25 years? (c) How much is the bond currently worth? (a) Over the first 5 years, the bond has paid $ ____. (Simplify your answer.) (b) Over the next 25 years, the bond will pay the buyer $ _____. (Simplify your answer.) (c) The bond is currently worth $ _______.
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