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| rev | Admin | (Created page with "'''Solution: B''' Jeff’s monthly cash flows are coupons of 10,000(0.09)/12 = 75 less loan payments of 2000(0.08)/12 = 13.33 for a net income of 61.67. At the end of the ten years (in addition to the 61.67) he receives 10,000 for the bond less a 2,000 loan repayment. The equation is <math display = "block"> \begin{align*} 8000=61.67a_{\overline{120}|i^{(12)}/12}+8000(1+i^{(12)}/12)^{-120} \\ i^{(12)/12} = 0.00770875 \\ i =1.00770875^{12}-1=0.0965=9.65\%. \end{align*}...") | Nov 19'23 at 18:37 | +509 |