Consider annual coupon bond with face value

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Reference no: EM131990547

1. Using a new technology, you estimate that you can save $1,300,000 per month, beginning in 3 months from now. How much should you spend so that you can use this technology at 1% per month (compounded monthly) if you want to get your investment back in 2.5 years? Use interest factors to solve this problem.

2. Consider an annual coupon bond with a face value of ?$100?, 9 years to? maturity, and a price of ?$85. The coupon rate on the bond is 8?%. If you can reinvest coupons at a rate of 5?% per? annum, then how much money do you have if you hold the bond to? maturity?

Reference no: EM131990547

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