1. How much should an investor pay for $500,000 of debenture bonds that pay interest every six months at an annual rate of 12%, assuming that the bonds mature in 10 years and that the effective interest rate at the date of purchase is also 12%?

2. How much should an investor pay for $100,000 of debenture bonds that pay $7,000 of interest every six months, have a maturity date in 10 years, and are sold to yield 12% interest, compounded semiannually?