Amie has just inherited $5,000 from a distant cousin and is considering two bonds for investment. Bond A has a $5,000 face value, an 8% coupon, pays interest semiannually and has 13 years to maturity. Bond B has a $5,000 face value, a coupon of 6%, pays interest annually and has 9 years to maturity. The rate expected in the marketplace for investments similar to these is 7%.

Bond A Bond B What is the present value of the coupon stream? ___________ ____________ What is the present value of the face value? ___________ ____________ What is the total present value? ___________ ____________ If the prices are equal, which should Amie choose? ______________ A or B