What is the difference in retirement funds

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Reference no: EM132009649

1. Altria has a 7% coupon 25 year bond (par value = 1,000). Assume that coupon payments are semiannual and that the yield-to-maturity is 6.5%. What is the price of this bond?

2. Jim will retire in 30 years. He will invest $100 each month for 15 years and then let the accumulated value continue to grow for the next 15 years. Jim’s brother Jack also will retire in 30 years. He plans on doing nothing during the first 15 years, then contributing twice as much—$200 monthly—to “catch up.” Assume 8%, compounded monthly for Jack. Will Jack have the same amount as Jim? Is the amounts are different, what is the difference in retirement funds?

Reference no: EM132009649

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