Task 6 The British government has a consol bond outstanding paying 100 per year forever. Assume the current interest rate is 4% per year. a. What is the value of the bond immediately after a payment is made? b. What is the value of the bond immediately before a payment is made? a. What is the value of the bond immediately after a payment is made? Answer: The value of the bond immediately after a payment is made is ..... L. Task 7 You work for a pharmaceutical company that has developer a naw ring. The patent on the drug will last 17 years. You expect that he drug's profits will be $2 milion in its first year and that this amount will grow at a rate of 5% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will ikely drive profits to zero. What is the present value of the new drug in the interest rate is 10% per year? Answer: The present value is $... million Task 8 You are thinking of purchasing a house. The house costs $350,000. You have $50,000 in cash that you can use as a down payment on the house, but you need to borca the rest of the purchase price. The bank la offering a 30-year mortgage that requires Annual payments and has an interest rate of 7% per year. What will your annual paymenil Le f you sign up for this mortuage? Answer: The annual payment is s.. Task 9 Your bank account pays interest with an EAR of 4's. What is the APR quote for this account based on semiannual compounding? What is the APR with monthly compounding? Answer: With semiannual payments, the APR is... %