NOTE: THIS PROBLEM MUST BE SOLVED IN EXCEL, with NO ROUNDING of INTERMEDIATE RESULTS

Consider a bond that has irregular cash flow promises before it matures in 10 years. Assume the discount rate is a constant 8% across all maturities.

Year	0	1	2	3	4	5	6	7	8	9	10
Promised Payments		200	200	300	500	500	500	600	600	800	900

(a) what is the Macaulay Duration of this set of cash flows? Answer correctly to 2 decimal places.

(b) Assume a financial intermediary needs $1000,000 in exactly T years from today, where T is the "duration" in years you found in part (a). What $ investment is required in these bonds so that the firm will have $1000,000 in T years. Calculate your answer correct to the nearest dollar.

Note to get the correct answer for (b) do not round your answer to part (a) during the calculation. This should be done in excel.