Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 44

Due to a significant troop buildup at the local military base, a school district issued $10,000,000 in bonds to build new schools. The bond coupon rate is 6% per year, payable semiannually, with a maturity date of 20 years. If an investor is able to purchase one of the bonds that has a face value of $5000 for $4800, what rate of return per 6 months will the investor realize Assume the bond is kept to maturity.