Mark decides to obtain funding through the issuance of $10,000,000 in bonds with a annual coupon rate of 7%, interest paid every six months (semi-annually) and a maturity date 10 years from date of issuance. After presenting the bonds to a select group of investors, Mark's investment bankers tell him they can sell the bonds, but the bonds must provide a market yield of 8% annually.

1. Will the bonds sell at a discount or premium?

2. What is the amount of funds received from the investors?