You bought a 4-year 14% semiannual coupon bond today. Par value of the bond is $1,000. One year ago this bond had a maturity of 5 years and sold for $1,200. The required rate of return for this bond today is 2% higher (compounded semiannually) than it was 1 year ago.

1. What is the price of the bond today? 2. Suppose you hold the bond for 2 years and then sell it at an interest rate of 10% compounded semiannually. At what price will you sell the bond in two years? 3. What would be the actual rate of return that you earned during the 2-year holding period?

Please show all steps. Don't round off until you get to the end.