Hi guys,
I am doing some exercises on fixed income securities in order to prepare for an exam and I have a question about calculating spot rates given certain bond information:
B1 (coupon bond): Price=98, interest=3%, principal=100, maturity=1 year
B2 (annuity bond): Price=97, interest=3%, principal=100, maturity=2 years
B3 (coupon bond): Price=85, interest=0%(!), principal=100, maturity=3 years
B4 (serial bond): Price=96,5, interest=4%, principal=100, maturity=4 years.

I am to calculate all spot and forward rates. My problem is the math. I only have available pen, paper and a very basic calculator (no symbolic functionality). My approach is to find the 1-year spot rate from B1, then 2-year spot rate from B2 (by plugging in the 1-year spot rate and solving for it) and so on. But solving by hand when I have something raised to the power of 3 and 4 is tough. Is this the right approach or is there a simpler way to answer the question?

Also i have doubts about the cash flows of the annuity bond. I have calculated the 2 cash flows to be 52.26 each. Is this correct?

Any help is very much appreciated

/Mads

PS: I hope it is clear that I have actually spend time trying to solve, and am not just looking for someone to do the work for me :-)