An Iowa state savings bond can be converted to $500 at maturity 11 years from purchase. If the state bonds are to be competitive with U.S. savings bonds, which pay 7% annual interest (compouned annually), at what price must the state sell its bonds? Assume no cash payments on savings bonds prior to redemption. Ingore taxes.

An Iowa state savings bond can be converted to $500 at maturity 11 years from purchase. If the state bonds are to be competitive with U.S. savings bonds, which pay 7% annual interest (compouned annually), at what price must the state sell its bonds? Assume no cash payments on savings bonds prior to redemption. Ingore taxes.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 8DQ

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