Answer:

3. John is 25. and is saving for retirement at age 55. He doesn't know if he should save in three lumpsIr or in equal annual amounts. Consider the two options below {a 8: h] and calculate which one will generate more savings at John's [55'11 year. Interest rates are 5% a. He will make deposits of $20,000 at ages 45. 55 and 60. b. He will make annual payments of $2,000 every year between now and his [55''1 year. Show your work to determine how much John will have at age 55 with each of the options. GE issued 10-year bonds when the rates were Th5 annually. Par value is $1,000 and coupon payments are paid semi-annually. Four years later. rates have dropped to 5.5%. What is the current price of the bonds?I Another year later [ve years after issue] the bonds are now trading at 93, what is the yield to maturity at this time? :14 p13]