If the time value of the money is .10 how much do you have to save per year for 20 years to have $50,000 per year for perpetuity? Assume that the first deposit is immediate and that the first payment will be at the beginning of the 21st year.

Suppose that you decide to hold the bonds in the previous question for a year, and then sell them. The next year, the interest rate on comparable bonds increases to 9.5%. How much will you be able to sell them for at that time? If you received a 5% rate of return on your money and you stick the coupons in the bank, in retrospect, would you have been better off selling the bonds when you first got them, or, holding them for a year, and selling them at the higher yield (9.5%)? Solve with Excel.