The Table below calculates the one-year real rate of return on different-maturity $10,000 Face Value discount bonds when interest rates rise from 4.3% to 7.1% over the one-year period. Use the discount bond formula and assume the one-year interest yield is the same for all maturities: Pt corresponds to 4.3% interest rate for the formula, and Pt+1 corresponds to 7.1% interest rate. (28 marks)
Maturity in years	Initial Interest Yield (YTM = i1)	Initial Price (Pt) at i1 = 4.3%	Price Next Year (Pt+1) at i2 = 7.1%	Capital Gain (g%)	Rate of Inflation (%)	Real Rate of Return (RRET%)
25	4.3%		1,799.962		1.8
20	4.3%	4,308.378		-41.13	1.8	-38.63
15	4.3%		3,574.028		1.8
10	4.3%	6,563.824			1.8
5	4.3%	8,101.743		-12.406	1.8	-9.906
2	4.3%		8,718.084		1.8	-2.66
1	4.3%	9,587.728	10,000	0	1.8

Include the negative sign in your table data where appropriate. Do not include the percent sign.(2marks each):

Part 1: Calculate the purchase price (Pt) for the 25-year bond:

Part 2: Calculate the purchase price (Pt) for the 15-year bond:

Part 3: Calculate the purchase price (Pt) for the 2-year bond:

Part 4: Calculate the sale price (Pt+1) for the 20-year bond:

Part 5: Calculate the sale price (Pt+1) for the 10-year bond:

Part 6: Calculate the sale price (Pt+1) for the 5-year bond:

Part 7: Calculate the capital gain (g) on the 25-year bond:

Part 8: Calculate the capital gain (g) on the 15-year bond:

Part 9: Calculate the capital gain (g) on the 10-year bond:

Part 10:Calculate the capital gain (g) on the 2-year bond:

Part 11: Calculate the real rate of return (RRET) on the 25-year bond:

Part 12: Calculate the real rate of return (RRET) on the 15-year bond:

Part 13: Calculate the real rate of return (RRET) on the 10-year bond:

Part 14: Calculate the real rate of return (RRET) on the 1-year bond: