Gimli must to pay $6000 to Legolas one year from today and $11500 to Arwen two years from today. To match the obligations, Gimli plans to purchase bonds today. The following bonds are available for purchase today:
bullet One-year zero-coupon bonds with 7% yield
bullet Two-year zero coupon bonds with 6.5% annual yield
bullet Two-year 9% par-value bond with annual coupons and 6% annual yield
Gimli purchases the bonds so that the redemption amount of the two-year zero-coupon bond is 5 times the redemption amount of the two-year coupon bond. Find the purchase prices for each of these bonds if Gimli uses the bonds to exactly match the obligations.
One-year zero-coupon bond: $
Two-year zero-coupon bond: $
Two-year coupon bond: $