Question: General Mills has a $1,000 par value, 28-year to maturity bond outstanding with an annual coupon rate of 7.69 percent per year, paid semiannually. Market

General Mills has a $1,000 par value, 28-year to maturity bond outstanding with an annual coupon rate of 7.69 percent per year, paid semiannually. Market interest rates on similar bonds are 10.15 percent. Calculate the bonds price today.

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=+ 6. This question asks you to analyze in more detail the two-sector endogenous growth model presented in the text.

=+ c. Write down the equation of motion for k, which shows k as saving minus break-even

=+investment. Use this equation to draw a graph showing the determination of steady-state k. (Hint: This graph will look much like those we used to analyze the Solow model.)