Assume the par value of the bonds in the following problems is $1,000 unless otherwise specified

1) The Pioneer Petroleum Corporation has a bond outstanding with an $85 annual interest payment, a market price of $800, and a maturity date in five years. How much should you be willing to pay for this bond if your required rate of return is 10%?

2) Preston Corporation has a bond outstanding with an $80 annual interest payment, a market price of $1,250, and a maturity date in 10 years. Assume the par value of the bonds is $1,000. How much should you be willing to pay for this bond if your required rate of return is 8%?