You are given the following information concerning a bond:

Face value: $100,000.00

Redemption value: $120,000.00

Term to maturity: 4 years

Annual coupon rate: 5% payable annually

(Term, Annual Spot Rate)

(1st Term, Annual Spot Rate:17.0%), (2nd Term, Annual Spot Rate:27.5%), (3rd Term, Annual Spot Rate:38.0%), (4th Term, Annual Spot Rate:48.5%)

Calculate the following if the bond is sold at a price equal to its value.

a)The price of the bond.

b)The annual effective yield.