Capital gain yield of bond

Question

Problem:

A bond has a par value of $1,000, a time to maturity of 10 years, and a coupon rate of 8% with interest paid annually.

Required:

Question: If the current market price is $750, what is the capital gain yield of this bond over the next year?

• .72%
• 1.85%
• 2.58%
• 3.42%

Note: Explain all calculation and formulas.