How much did alicia deposit each year

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Reference no: EM131962432

Alicia bought a newly issued $1,000 20% ten-year bond, redeemable at $1,100 and having yearly coupons. It was bought at a premium with a price of $1,400. Alicia immediately took a constant amount D from each coupon and deposited it in a savings account earning 8% effective annual interest, so as to accumulated the full amount of the premium by ta moment after the final deposit. How much did Alicia deposit each year in the 8% account?

Please show steps and set up a formula. No Excel

Reference no: EM131962432

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