1. The current interest rates are at 8.50%. The bond you’re holding pays you $45 semi-annually for the next ten years. What is the present value of your bond, which has a maturity value of $1,000?
2. Your uncle Harold recently inherited $100,000 and he is 75 years old. He’d like to see how much money she can take annually from the investment if it earns 8% (annually). Based upon his family genes, he thinks she will likely live to 90 years old. How much can he take from this investment annually if her estimates are correct?