1. Find the yield on a 8-year corporate bond with maturity risk premium estimated to be 0.1*(t-1) %, where t is time to maturity. Inflation premium is 2% and default risk premium of 0.5%. Assume that real risk-free rate is 1% and liquidity premium is 0.4%.
2. Using an example, compare and contrast simple interest and compound interest?
3. If you finance $10,000 to buy a car at 5% interest for 5 years, what would be the amount of interest owed? What would be the monthly payments for the loans? What is the APR for this particular loan?