You buy a $2,000 bond on August 15, 2014, paying bond interest at j₂ = 6% and redeemable at par on August 15, 2024.

a) How much did you pay for the bond if your desired yield rate is j₂ = 7%?

b) After exactly 5 years you sell the bond. Interest rates have dropped and the bond is sold to a buyer to yield at j₁ = 4%. Determine the sale price.

c) Determine the approximate value of the yield rate j₂ to the maturity using the method of average if the bond is quoted at 109.50 on August 15, 2019.