Click on the table icon to view the PVIF table Click on the table icon to view the PVIFA table According to the figure below, as a bond approaches maturity the premium (or discount) reduces to zero. Prove this by calculating the sales price with 7, 5, and 2 years remaining to maturity for the following two bonds. Assume a constant yield to maturity of 7 percent. a. A 10-year, 10 percent annual coupon bond. b. A 10-year, 5 percent annual coupon bond. $1,117 Bond value when required rate of retum-9% (premium bond) Bond value when required rate of return -12% $1,200 $1,053 $1.100 Maturity $1,000 (Round to the nearest cent.) (Round to the nearest cent.) (Round to the nearest cent.) a. The sales price, PV, of a 10-year, 10 percent annual coupon bond, a yield to maturity of 7 percent and with 7 years remaining to maturity is $ The sales price, PV, of a 10-year, 10 percent annual coupon bond, a yield to maturity of 7 percent and with 5 years remaining to maturity is $ The sales price, PV, of a 10-year, 10 percent annual coupon bond, a yield to maturity of 7 percent and with 2 years remaining to maturity is $ b. The sales price, PV, of a 10-year, 5 percent annual coupon bond, a yield to maturity of 7 percent and with 7 years remaining to maturity is $ (Round to the nearest cent.) The sales price, PV, of a 10-year, 5 percent annual coupon bond, a yield to maturity of 7 percent and with 5 years remaining to maturity is $ The sales price, PV, of a 10-year, 5 percent annual coupon bond, a yield to maturity of 7 percent and with 2 years remaining to maturity is $ (Round to the nearest cent.) (Round to the nearest cent.) Data table Data table VORUO Compound Sum of $1 (PVIF) n 6% 796 8% 9% 10% Compound Sum of $1 (PVIFA) 2 0.890 0.873 0.857 0.842 0.826 n 6% 7% 8% 9% 10% 2 1.833 1.808 1.783 1.759 1.736 5 0.747 0.713 0.681 0.650 0.621 7 0.665 0.623 0.583 0.547 0.513 5 4.212 4.100 3.993 3.890 3.791 10 0.558 0.508 0.463 0.422 0.386 7 5.582 5.389 5.206 5.033 4.868 10 7.360 7.024 6.710 6.418 6.145