Jones issues a 4-year, 6% bond on December 31, 2016 with a par value of $5,000. The issue price is 98% of par value.

Present value analysis a. Bond price. Suppose that the market interest rate decreases to 4%. Use the present value factors in the table below to help you calculate the new market bond price. b. PV factors. Show how the PV factors are calculated using either a math formula or an Excel formula. The PV formula for the principal amount is (1+i)n1, and the annuity formula for interest is i1(1+i)n, where i is the per period (i.e., 6-month) interest rate, and n is the number of periods till maturity. The PV factor in the interest can also be calculated using the Excel formula "=PV(i,n,-1)." Alternative: PV factor for interest payments =(1(1+R)T)/R>