1.

Bond Valuation with Annual Payments

Jackson Corporation's bonds have 9 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 6%. The bonds have a yield to maturity of 7%. What is the current market price of these bonds? Do not round intermediate calculations. Round your answer to the nearest cent.

2.

Yield to Maturity for Annual Payments

Wilson Corporations bonds have 10 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 7%. The bonds sell at a price of $985. What is their yield to maturity? Round your answer to two decimal places.

%

3.

Quantitative Problem: You need $18,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 4 years, with the first payment to be made one year from today. He requires a 5% annual return. Do not round intermediate calculations. Round your answers to the nearest cent.

1. What will be your annual loan payments?

   $

2. How much of your first payment will be applied to interest and to principal repayment?

   Interest: $

   Principal repayment: $