6-7

6-7. Assume that a 6 percent $500,000 bond $10,000 to buy kitchen equipment. It took out a mortgage from a bank, agreeing to repay the full amount plus interest at a 6 percent rate in 10 annual installments. How much will it pay the bank each year? purchased today, when market interest rates are 4-5 percent. How much would you have to pay to buy the bond? 6-8. You could purchase a zero coupon bond that has a maturity value of $25,000 and earns a current market rate of 3 percent. If the bond matures in 10 years and we assume semiannual compounding, what is the bond worth today? with semiannual interest payments and a remaining life of 10 years could be