Last year, a firm issued 30-year, 8% annual coupon bonds at a par value of $1, XXXXXXXXXXSuppose that 1 year later the going rate drops to 6%. What is the new price of the bonds, assuming that they...

Last year, a firm issued 30-year, 8% annual coupon bonds at a par
value of $1,000. (1) Suppose that 1 year later the going rate drops
to 6%. What is the new price of the bonds, assuming that they now
have 29 years to maturity? ($1,271.81) (2) Suppose instead that 1
year after issue, the going interest rate increases to 10% (rather
than dropping to 6%). What is the price? ($812.61)