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How much will you have after ten years

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a. A new financial product will give you a monthly return of 0.03% if you invest $200 per month for ten consecutive years. How much will you have after ten years?

b. Lannister is planning to invest in a 10-year bond with a face value of $1,000 that pays a 10.4 percent coupon (paying semi-annually). Assume that coupon payments will be semi-annual. The current market rate for similar bonds is 8.5 percent. What is the maximum price that should be paid for this bond? Is the bond selling at a discount and why?

Reference no: EM133071223

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