Los Angeles issued a 30-year $60,000,000 education bond in 2006. Due to a call provision and longer maturity date the bond is issued with a high coupon rate of 10% with payments made every six months.

a.If the market rate was 8%, how much did the city receive when it issued the bond in 2006?

b. Suppose there were no coupon rate at all. With a zero-coupon bond, no interest payments are made during the life of the bond, although out of tradition, interest is assumed to compound twice a year. The face value of the bond is paid at maturity. How much would the city have received if it had issued a zero-coupon bond. (Assume semiannual compounding).