1. Rau Inc. has 7.0 percent coupon bonds on the market with 9 years to maturity. The bonds make semi-annual payments and currently sell for 80 percent of par. What is the YTM? Please show detailed work.
2. Lulubelle offered to loan her money to buy a house. Auntie Lulu, as they call her, offered her a $95,000 loan at a 12% interest rate for 10 years. What will her payment be if she makes equal quarterly installments over the next ten years?