Premier Life Insurance Company estimates it will need to pay out $25 million in 6 years. To fund this future obligation, corporate bonds offering a coupon rate of 6.4% are purchased. The market requires a yield to maturity of 7.2% for such bonds.

1. What must be the effective maturity of these bonds? (Round to 2 decimal places) (Use of an Excel spreadsheet will be helpful)

1. Six months go by and Premier Life Insurance Company wants to re-balance its portfolio. Premier has available bonds it can purchase that have a coupon of 8 percent and yield 9.75 percent. What will the maturity of these new bonds be? (Round to 2 decimal places)