Final answer:
The market price of an Escambia county $1,000 bond selling at 109.443 is $1,094.43. The selling price is determined by multiplying the face value of the bond by the selling price percentage. Bond prices fluctuate depending on the interest rates and their relationship to the bond's coupon rate.
Step-by-step explanation:
The market price of an Escambia county $1,000 bond selling at 109.443 is calculated by multiplying the bond's face value with the selling price percentage. Therefore, a bond with a face value of $1,000 selling at 109.443% of its face value will be priced at $1,000 × 109.443% = $1,094.43.
When the bond's interest rate is lower than the market interest rate, its price will be adjusted to yield a competitive rate. For example, if the bond is paying less than the current market rate of 12%, its price will drop to provide an equivalent yield. Bonds will therefore trade at a discount or a premium relative to their face values based on the changes in market interest rates and their own coupon rates.