A 5-year coupon bond is priced at $100. It has a face and redemption value of $100 and a coupon rate of 10% per annum payable semiannually.

1. Use The Salesmans Rule to find the approximate per annum yield to maturity. Use a bond Rule to find the exact per annum yield to maturity.
2. If the coupons can be reinvested at 8% per annum compounded semiannually then find the total account balance at the end of 5 years (i.e. the terminal wealth of the bond at the end of term) and find the interest on interest at the end of the 5 years.