Imagine that a $10,000 ten-year bond was issued at an interest rate of 6%. You are thinking about buying this bond one year before the end of the ten years, but the interest rate a savings account...

Imagine that a $10,000 ten-year bond was issued at an interest rate of 6%. You are thinking about buying this bond one year before the end of the ten years, but the interest rate a savings account pays currently is 9%.

Calculate what you would be willing to pay for this bond.

Suppose that the savings account interest rate is not 9%, but 7%. How much would you be willing to pay for this bond now? Compare the value of this bond under two different interest rates.