You will be paying $8,800 a year in tuition expenses at the end of the next two years. Bonds currently yield 8%.
a. What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.)
Present Value :
Duration : years
b. What maturity zero-coupon bond would immunize your obligation? (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Face value" to 2 decimal places.)
Duration: years
Face Value :