1. One of you customer is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $500 per month. You will charge 1.5 percent per month interest on the overdue balance. If the current balance is $18000, how long will it take for the account to be paid off?
2. A firm has some bonds maturing in 7 years, with par value of $1,000. Those bonds make annual coupon payment of $70. The market interest rate on similar bonds is 8.5%. What is the bond's price?