You own a 8 year bond that has a face value of $20,000 and pays 10% a year in interest, once a year, at the end of the year. Two years after buying it, the interest rate increases to 13%. You do not...

You own a 8 year bond that has a face value of $20,000 and pays 10% a year in interest, once a year, at the end of the year. Two years after buying it, the interest rate increases to 13%. You do not want to wait 6 more years to get your principle of $12.000 back because you really need the money, so you decide to sell it on the open market.

1. How much can you sell it for?

2. Would it be a capital loss or gain and how much? How much is the capital gain or loss?