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How to solve Question: You are considering buying a junk bond that...

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Accounting

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Question: You are considering buying a junk bond that promises 5
coupon payments of $30 each. The payments are promised to occur
every year starting later today. You decide that for this bond, the
effective annual discount rate for the first three years (i.e. from
today to three years from today) is 29%. The effective annual
discount rate after the first three years (i.e. from three years from
today onward) is 39%. Based on these assumptions, what is the
present value of the 5 coupon payments?
Question: What is the annuity factor if Abbie receives $7,000 per
year each year for 30 years, starting one year from today? Assume
the effective annual interest rate is 12%.
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