1. An unconventional bond makes no coupon payments for 5 years. After that, the coupon rate is 4% for 3 years and then 8% for 7 years. The bond matures in 16 years and has a yield to maturity of 5%. When does the bond begin to behave like a normal premium bond?

A) In 8 years

B) In 7 years

C) In 5 years

Please show all steps and explan why the answer is correct. 

2. You are planning to purchase a car in three years and wish to have $10,000 for a down payment. You have access to an account that earns 12%, compounded monthly. How much do you need to deposit into the account today in order to reach your goal?

A) $2,963.49

B) $7,117.80

C) $6,989.25

Please show all steps and explan why the answer is correct.