The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S has a maturity of 1 year.

2. What will be the value of each of these bonds when the going rate of interest is 5%? Assume that there is only one more interest payment to be made on Bond S. Do not round intermediate calculations. Round your answers to the nearest cent.
3. BondL:$
4. BondS:$
5. What will be the value of each of these bonds when the going rate of interest is 9%? Assume that there is only one more interest payment to be made on Bond S. Do not round intermediate calculations. Round your answers to the nearest cent.
6. BondL:$
7. BondS:$
8. What will be the value of each of these bonds when the going rate of interest is 13%? Assume that there is only one more interest payment to be made on Bond S. Do not round intermediate calculations. Round your answers to the nearest cent.
9. BondL:$
10. BondS:$
11. Why does the longer-term (15-year) bond fluctuate more when interest rates change than does the shorter-term bond (1 year)?
12. I.Longer-term bonds have less interest rate risk than shorter-term bonds.
13. II.Longer-term bonds have less reinvestment rate risk than shorter-term bonds.
14. III.Longer-term bonds have more interest rate risk than shorter-term bonds.