You bought a 10-year bond for $1,000 on Jan 1, 2010 with an interest rate of 10%. At the end of year 3, the interest rate in the market for a comparable bond went up to 20%. What should be the market price of the bond on Jan 1, 2013? You can assume that that the bond pays interest once at the end of the year also?

1. $500
2. $842.6
3. $639.5