Four and one-half years ago Gavin purchased a $25,000 bond in a new Province of Ontario issue with a 20-year maturity and a 6.1% coupon. If the prevailing market rate is now 7.1% compounded semiannually:
a) What would be the proceeds from the sale of Gavin's bonds?
b) What would be the capital gain or loss (expressed as a percentage of the original investment)?
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