1. A 7%, 20-year municipal bond has a $10 000 face value. I want to receive at least 10% compounded semiannually on this investment. How much should I pay for the bond?
2. A Paradorian bond pays $500 (Paradorian dollars) twice each year and $5000 five years from now. I want to earn at least 300% annual (effective) interest on this investment (to compensate for the very high inflation in Parador). How much should I pay for this bond now?