Part 1. A 5-year Treasury bond has a 4.25% yield. A 10-year Treasury bond yields 6.45%, and a 10-year corporate bond yields 9.75%. The market expects that inflation will average 3.75% over the next 10 years (IP₁₀ = 3.75%). Assume that there is no maturity risk premium (MRP = 0) and that the annual real risk-free rate, r*, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury securities: DRP = LP = 0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described.

What is the yield on this 5-year corporate bond? Round your answer to two decimal places.

Part 2. You are considering a 25-year, $1,000 par value bond. Its coupon rate is 11%, and interest is paid semiannually. The data has been collected in the Microsoft Excel Online file below.

If you require an "effective" annual interest rate (not a nominal rate) of 7.76%, how much should you be willing to pay for the bond? Do not round intermediate steps. Round your answer to the nearest cent.

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Thank you!