1. Company X issues a 20 year $1000 bond, paying annual interest of 8%. Similar bonds are paying 10%. You do not have to solve this, but what factors would you use to solve this (i.e. what are f, n, c, i)?

2. How much you invest today to see your investment grow to $8000 in 10 years, at 8%? Please show all work.

3.You will receive $1000 per year for 20 years, it pays 5% interest. What is the value in today's dollars?

4.Mary invests $5000 in a savings account compounded yearly. How much return will she earn in 7 years at 8%?

5. Company A issues a bond maturing in 10 years, it is rated AAA ; Company 2 also issues a bond maturing in 10 years, but this bond is rated BBB.

Which bond would you expect to have a higher coupon? Please explain your answer.