A city is selling municipal bonds to finance a new rural road. The bonds, which will mature in 35 years, have a face value of $1,000 each with a dividend of 10% per year, payable annually. Assume you purchased one bond at a discounted price of $625 and then sold it for $675 one year later, immediately after receiving the annual dividend. What rate of return did you make on your investment? (Round the final answer to two decimal places.) PO The rate of return on the investment is %.

A city is selling municipal bonds to finance a new rural road. The bonds, which will mature in 35 years, have a face value of $1,000 each with a dividend of 10% per year, payable annually. Assume you purchased one bond at a discounted price of $625 and then sold it for $675 one year later, immediately after receiving the annual dividend. What rate of return did you make on your investment? (Round the final answer to two decimal places.) PO The rate of return on the investment is %.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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