1. You are working part-time and planning a holiday which requires $5,000 for flights and accommodation in 2 years. What is the annual deposit for the next 2 years? Assume a 3% per annum interest rate throughout. Fill in the blank below with the correct answer, rounded to 2 decimal places. You need to save ______ every year for the next 2 years.
2. The Faulk Corp. has a 5 percent coupon bond outstanding. The Gonas Company has a 12 percent bond outstanding. Both bonds have 8 years to maturity, make semiannual payments, and have a YTM of 8.5 percent. If interest rates suddenly fall by 1 percent, the percentage change in price of Faulk Corp. and Gonas Company is _______ percent and _________ percent, respectively.