1. You plan on retiring in 30 years from now. One month after you retire you plan on withdrawing $10,000 per month from your retirement account for the remainder of your life for 30 years. You also plan on leaving your four grandchildren $10,000 each. If your retirement account offers 10% compounded monthly, how much must you save each month of your working life so that you can meet your goals?
A: $904.99
B: $504.99
C: $804.99
D: $704.99
E: $604.99
2. ?Assume that the Treasury bond yield today is 2 percentage points higher than it was one year ago. Also assume that the credit (default) risk premium of an A-rated bond declined by 0.4 percentage point since one year ago. A newly issued A-rated bond will likely offer a yield today that is ____ the yield that was offered on an A-rated bond issued one year ago.
a. ?greater than
b. ?equal to
c. ?less than
d. ?A or B are both common