1. What is the Macaulay duration of a 7 percent coupon bond with five years to maturity and a current price of $1,025.30? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.)
2. How long does it take for $856 to grow into $1,122 at an annual interest rate of 7%. Show your work. If you use excel show formulas.
3. Tony borrowed $100,000 for twenty years at an annual effective rate of 8%. He will repay the loan with annual payments at the end of each year-his first payment is due one year from the loan date. The size of each payment will increase by 3% each year. How much will Tony still owe right after his fifth payment?