Problem 1. Amortizing Bond Assume that a bond makes 30 equal annual payments of $1, 000 starting one year from today. {This security is sometimes referred to as an amortizing bond.)I If the discount rate is 3.5% per annum, what is the current price of the bond? {Hint: Recognize that this cash ow stream is an annuity and that the price of an asset is the present value of its future cash ows.) Problem 2. Coupon Bond Assume that a bond makes 10 equal annual payments of starting one year from today. The bond will make an additional payment of $100,000 at the end of the last year, year 10. {This security is sometimes referred to as a coupon bond.) If the discount rate is per annum, what is the current price of the bond? {Hintz Recognize that this bond can be viewed as two cash ow streams: (1) a 10-year annuity with annual payments of $1,000, and (2] a single cash ow of $100,000 arriving 10 years from today. Apply the tools you've learned to value both cash ow streams separately and then add.) Problem 3. Personal Finance You will start college one year from today, at which time the rst tuition payment of $58,000 must be made. Assuming that tuition does not increase over time and that you remain in school for four years, how much money do you need today in your savings account, earning 5% per annum, in order to make the tuition payments over the next four years? * Make sure to input all currency answers without any currency symbols or commas, and use two decimal places of precision. Problem 4. Perpetuities Imagine that the government decided to fund its current deficit of $431 billion dollars by issuing a perpetuity offering a 4% annual return. How much would the government have to pay bondholders each year in perpetuity? Express your answer in billions of dollars. {Hintz The $431 billion is just the present value of these cash ows at a discount rate of 4%.) *Make sure to input all currency answers without any currency symbols or commas, and use two decimal places of precision