The bond consists of a 10 -year, 10% annuity of $50 year plus a $500 lump sum at t=10. Note: To receive full credit, show numbers / formulas you used to get your answer(s). 1. ( 3 points) Find present value of annuity. 2. (3 points) Find present value of maturity. 3. (3 points) Find value of bond. 4. ( 3 points) What would happen if expected inflation rose by 3%, causing r=13% ? Find value of bond. 5. ( 3 points) What would happen if inflation fell and r declined to 7% ? Find value of bond. 6. ( 3 points) What is the relationship between r and the value of bond