Suppose that someone owns a 30-year $21 000 T-bond with a rate of 6%. After 5 years the bond is sold for cash, but interest rates have fallen to 3.5%. (a) How much has the bond paid in total for the first 5 years? (b) How much will the bond pay the person buying it over the next 25 years? (c) How much is the bond currently worth?
(a) Over the first 5 years, the bond has paid$ ____. (Simplify your answer.)
(b) Over the next 25 years, the bond will pay the buyer $ _____. (Simplify your answer.)
(c) The bond is currently worth $ _______.