1. Find the present value of a 2-year Treasury bond that pays a semi-annual coupon, has a coupon rate of 6%, a yield to maturity of 5%, a par value of $1,000 when the yield to maturity is 5%.
2. Find the interest rates earned on each of the following. Round each answer to two decimal places.
You borrow $700 and promise to pay back $728 at the end of 1 year. %
You lend $700 and the borrower promises to pay you $728 at the end of 1 year. %
You borrow $93,000 and promise to pay back $122,382 at the end of 7 years. %
You borrow $10,000 and promise to make payments of $2,504.60 at the end of each year for 5 years. %