1. Panhandle Ventures' recently issued bonds that mature in 20 years. They have a par value of $1,000 and an annual coupon of 5%. If the current market interest rate is 8%, at what price should the bonds sell?

A. None of the choices is correct

B. $705.46

C. $490.91

D. $996.98

E. $1373.87

2. George Jefferson established a trust fund that provides $175,500 in scholarships each year for worthy students. The trust fund earns a 4 percent rate of return. How much money did Mr. Jefferson contribute to the fund assuming that only the interest income is distributed?

$7,020,000

$4,387,500

$4,212,000

$3,096,873

$5,265,000