Basics of Engineering Economy 1st Edition by Leland Blank,Anthony Tarquin

Exercise 12

Fairchild Industries issued 4% bonds some years ago.Carla's grandfather told her he purchased one at a 5% discount when they were issued, and it has paid him $000 each 3 months for the last 15 years.He told her that he just received the 60th dividend and he plans to sell the bond tomorrow for the face value and give her this money to help with college tuition and expenses.
a.Determine the amount Carla will receive.
b.Use the PW method to determine the number of years to maturity printed on the bond certificate at issue time.
c.Calculate the effective annual rate of return on this investment using a PW relation.