An investor buys a 5% coupon bond that has a twenty-year life, $100 redemption value, and 8% required rate of return. After four years, the required rate of return has decreased to 7% and the investor sells the bond. The investor calculates the purchase price, carrying value, and selling price. What was the investor’s capital gain when selling the bond?

An investor buys a 5% coupon bond that has a twenty-year life, $100 redemption value, and 8% required rate of return. After four years, the required rate of return has decreased to 7% and the investor sells the bond. The investor calculates the purchase price, carrying value, and selling price. What was the investor’s capital gain when selling the bond?

An investor buys a 5% coupon bond that has a twenty-year life, $100 redemption value, and 8% required rate of return. After four years, the required rate of return has decreased to 7% and the investor sells the bond. The investor calculates the purchase price, carrying value, and selling price. What was the investor’s capital gain when selling the bond?