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1. A perpetuity pays 10 at end of year 1, 10(1.02) at end of year 2, 10(1:02)2 at end of year 3, 10(1:02)3 at end
1. A perpetuity pays 10 at end of year 1, 10(1.02) at end of year 2, 10(1:02)2 at end of year 3, 10(1:02)3 at end of year 4, etc.. Find the PV if market rate is 5%.
2. A bond has face value 100 and annual coupons of size 6. The redemption value after 8 years is 125. Find the price of the bond if the annual yield rate is 8%
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