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A three year loan requires payments of 1,000 at the end of the first year, 2,000 at the end of the second year and 3,000

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A three year loan requires payments of 1,000 at the end of the first year, 2,000 at the end of the second year and 3,000 at the end of the third year. Bonds with annual coupons at 5% (payable annually) are available for one, two and three year maturities. The following bonds are bought: One-year maturity with face amount X. Two-year maturity with face amount Y, Three-year maturity with face amount Z. Note that each face amount equals as well the redemption values. The face amounts are chosen so that the payments from the bonds exactly match the loan payments. Calculate X+Y +2. O 5258 O 5158 O 5458 O 5558 O 5358

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