What is the present value of a series of payments of $20,000 every three years in perpetuity with the first payment made immediately, if the annual rate is 7% compounded semi-annually?

Ploycorp bonds are selling for $103 (FV = 100) and mature in five years. The coupon rate is 5% with coupons paid quarterly. What is the effect annual yield on the bonds? Your supervisor would like you to confirm your answer using the excel Rate Function (Formula).

(Answer (a) to the nearest dollar; (b) as a percentage to the nearest basis point).