1. A Concrete Testing Laboratory borrowed $80,000 for new equipment at 8% per year compound quarterly. It is to be paid back over three years in equal quarterly payments.
a) How much interest is in the 8th payment?
b) How much principal is in the 8th payment?
c) What principal is owed immediately following the 8th payment?
d) If the Lab wants to pay all the credit on period 8, which amount should pay?
2) Shannon purchases a bound for $952.00. The bound matures in 3 years, and Shannon will redeem it at its face value of $1.000. Coupon payments are paid annually.
If Shannon will earn a yield of 12% year compounded yearly, what is the coupon rate on the investment?