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Answer:
1)
Additional amount required at the end of 10 years is caluclated by subtracting initial amount with accumulated amount at the end
where A = P(1+R)^T
1260000-200000*(1+6%/4)^40 = 1047727.29
Then we use this amount to find the additional prinicipal to deposited by the anuity formula:
1047727.29÷(((1+0.06/4)^40-1)÷(0.06/4)) = 256111.4732
2)
The period remaining for bond on the date of sale todenver national bond
= 6 year - 2 year
= 4 years
Amount received by Windsor on the date of sale
= ( semi annual interest × present value annuity factor (4.5%,6)) + ( bond value /(1.045)^6)
= ((490000×3%)*(1-(1.04)^8)/.04)) +
( 490000/(1.04)^8)
= 222589.0744
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