Ten 1000 par-value bonds with semiannual coupons of 50 are issued on January 1, 1992. One bond is redeemed on January 1, 2003, another on January 1, 2004, and so on until the last one is redeemed on January 1, 2012. What price should an investor pay for all ten bonds on January 1, 1992, in order to earn 11%

convertible semiannually? [Bonds like these are called serial bonds. The student will find that Formula (5.3), Makeham's Formula given in Question 5-12, is more convenient than Formula

(5.1) for finding the price of a serial bond.]

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