1. The value of the bond with a market interest rate of 8% is $1,159.71.
2. The value of the bond with a market interest rate of 15% is $899.44.
3. The new value of the bond after 2 years with market interest rate of 8% is $1,103.08.
4. The new value of the bond after 2 years with market interest rate of 15% is $931.50.
Data and Calculations:
N (# of periods) = 5 years
I/Y (Interest per year) = (A) 8% or (B) 15%
PMT (Periodic Payment) = $120
FV (Future Value) = $1,000
Results
PV = $1,159.71 and $899.44 for (B)
Schedule at 8% interest rate
Period PV PMT Interest FV
1 $1,159.71 $120.00 $92.78 $1,132.49
2 $1,132.49 $120.00 $90.60 $1,103.08
3 $1,103.08 $120.00 $88.25 $1,071.33
4 $1,071.33 $120.00 $85.71 $1,037.04
5 $1,037.04 $120.00 $82.96 $1,000.00
Schedule at 15% interest rate
Period PV PMT Interest FV
1 $899.44 $120.00 $134.92 $914.35
2 $914.35 $120.00 $137.15 $931.50
3 $931.50 $120.00 $139.73 $951.23
4 $951.23 $120.00 $142.68 $973.91
5 $973.91 $120.00 $146.09 $1,000.00
Learn more about the value of bonds based on effective interest rate here: https://brainly.com/question/25524725 and https://brainly.com/question/23265123
