1. A firm has bonds on the market making annual payments, with 8 years to maturity, a par value of $1,000, and selling for $900. At this price, the bonds have a yield to maturity of 5%. What must the coupon ratebe on the bonds? Round to the nearest 0.01%.

2. Lake Co. issued 15-year bonds a year agoat a coupon rate of 4.90%. The bonds make semiannual payments and have a par value of $1,000. If the yield to maturity is 4.50%, what is the current bond price? Round to the nearest $0.01.