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 8 percent. a. A 10-year, 10 percent annual coupon bond. b. A 10-year, 5 percent annual coupon bond. Click on the table icon to view the PVIF table ::. Click on the table icon to view the PVIFA table : $1,200 $1,117 Bond value when required rate of retum = 9% (premium bond) $1,053 $1,100 Maturity Bond value when required rate of return 12% $1,000 Market value $951 $900 $899 Bond value when required rate of retum = 15% (discount bond) $800 i 0 3 Years Left to Maturity (Round to the a. The sales price, PV, of a 10-year, 10 percent annual coupon bond, a yield to maturity of 8 percent and with 7 years remaining to maturity is $ nearest cent.) The sales price, PV, of a 10-year, 10 percent annual coupon bond, a yield to maturity of 8 percent and with 5 years remaining to maturity is $. (Round to the nearest cent.) The sales price, PV, of a 10-year, 10 percent annual coupon bond, a yield to maturity of 8 percent and with 2 years remaining to maturity is $. (Round to the nearest cent.) b. The sales price, PV, of a 10-year, 5 percent annual coupon bond, a yield to maturity of 8 percent and with 7 years remaining to maturity is $ nearest cent.) (Round to the The sales price, PV, of a 10-year, 5 percent annual coupon bond, a yield to maturity of 8 percent and with 5 years remaining to maturity is $. (Round to the nearest cent.) (Round to the nearest The sales price, PV, of a 10-year, 5 percent annual coupon bond, a yield to maturity of 8 percent and with 2 years remaining to maturity is $ cent.)