Q1/ If you contribute $1,000 a year into a savings account that earns 7% per year, how much will you have in 40 years?

a/ $40,000

b/ $389,483.12

c/ $52,112.34

d/ $199,635.11

Q2/ A Department has a bond outstanding with a coupon rate of 2.5% paid semiannually and 15 years to maturity. The yield to maturity on this bond is 4%, and the bond has a par value of $5,000. What is the price of the bond?

a/ $4,881.80

b/ $4,160.13

c/ $5,933.33

d/ $5,510.02