7. Assume the total cost of a college education will be $200,000 when your child enters college in 18 years. You presently have $20,000 to invest, but would also like to invest $2,600 per year at the end of each of the next 18 years. What annual rate of interest must you earn on your investment to cover the cost of your child's college education?

8. You want to buy a bond from XYZ Corporation. Your broker quotes a price of $1,020. The bond matures in 8 years. The face value is $1,000. The required rate of return is 9%, and the coupon rate is 6%. Will you buy the bond from the broker? Why or why not?

9. True or false: When the required rate of return decreases, the price of a bond increases.