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John takes a 4-year loan that has 48 end-of-the-month payments of K subject to the nominal annual interest rate of 12% compounded monthly. He uses
John takes a 4-year loan that has 48 end-of-the-month payments of K subject to the nominal annual interest rate of 12% compounded monthly. He uses the loan amount to purchase a $1,000 par value 8 year bond, yielding an annual nominal rate of 8% compounded semi-annually, and paying semi-annual coupons at a nominal annual rate of 6%. Find K.
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