i) Today is 1/1/2020, John plans to deposit $500 at the beginning of each month into an investment fund. The first deposit will be deposited today. John predicts that the return rate of this fund will be j₁₂=4.60% from 1/1/2020 to 30/6/2020 and j₁₂=4.91% from 1/7/2020 to 31/12/2020. What will be balance amount of this account on 31/12/2020?

Select one:

a. 6154.37

b. 6159.18

c. 6134.88

d. 6083.76

ii) Lily just purchased a 10-year 2.29% p.a. Treasury bond with a face value of $100. The bond will be redeemable at par (i.e., redeemed at face value). Yield rates over the next 10 years are expected to be j₂=4.50% from year 1 to year 3, j₂=2.07% from year 4 to year 7 and j₂=2.40% from year 8 to year 10.

How much should Lily pay at purchase (rounded to four decimal places)?

Select one:

a. 94.0763

b. 93.9880

c. 94.3426

d. 96.7155