How to solve
Question: You are considering buying a junk bond that promises
coupon payments of $ each. The payments are promised to occur
every year starting later today. You decide that for this bond, the
effective annual discount rate for the first three years ie from
today to three years from today is The effective annual
discount rate after the first three years ie from three years from
today onward is Based on these assumptions, what is the
present value of the coupon payments?
Question: What is the annuity factor if Abbie receives $ per
year each year for years, starting one year from today? Assume
the effective annual interest rate is
