2. You are planning to save for retirement over the next 40 years. To do this, you will invest $900 per month in a stock account and $500 per month in a bond account. The return of the stock account is expected to be 8 percent per year (compounded monthly), and the bond account will pay 6 percent per year (compounded monthly). When you retire, you will combine your money into an account with a 4 percent per year return (compounded monthly How much can you withdraw cach month from your account assuming a 25-year withdrawal period? 3. You are taking out a thirty-year mortgage loan of $470,000 from your bank. The interest rate is 4 per year, and the loan calls for equal monthly payments. How much interest is paid in the fourth month? How much total principal is paid after four months? (Draw an amortization table to answer the questions. Use of excel is highly encouraged.) 4. Bond Q is a 4 percent coupon bond. Bond R is an 6 percent coupon bond. Both bonds have 15 years to maturity, make annual coupon payments, and have a YTM of 6 percent. If interest rate (YTM) changes from 6 percent to 8 percent, what is the percentage price change of these bonds? What if the YTM suddenly falls from 6 percent to 4 percent instead? What does this problem tell you about the interest rate risk of lower-coupon bonds? 5. Rizzi Co. is growing quickly. The company just paid a S1.6 per share dividend and dividends are expected to grow at a 25%, 15% and 10% rate respectively for the next three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 11 percent, what is the current share price