The Florida Investment Fund buys 90 percent of the Gator Corporation through a broker. The bonds pay 8 percent annual interest. The yield to maturity (market rate of interest) is 10 percent. The bonds the bonds have a 25-year maturity.
Using an assumption of semiannual interest payments:
a. Compute the price of a bond (refer to "semiannual Interest and Bond Prices" in Chapter 10 for review if necessary).
b. Compute the total value of the 90 bonds.