a. Suppose that Nick borrows 1,000 from Nathan at an annual effective interest rate of x. He agrees to pay back 1,000 after six years and another 65.3 after another six years. What is the annual effective interest rate?

b. Suppose that three years after his first payment, Nick decides to make a final payment (instead of six years later). How much should Nick pay, if the total present value of his payments equals the original 1,000?

Answer both a and b