Emily Rogers purchased a 20-year U.S. Treasury bond five years ago and paid the face value of $4,000. The bond paid 4.15 percent annual interest. After five years, she sold the bond for $4,075. a. What is the annual interest amount for the bond? b. What is the total interest Emily earned during the five- year period?
Emily Rogers purchased a 20-year U.S. Treasury bond five years ago and paid the face value of $4,000. The bond paid 4.15 percent annual interest. After five years, she sold the bond for $4,075. a. What is the annual interest amount for the bond? b. What is the total interest Emily earned during the five- year period?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 18P
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Transcribed Image Text:Emily Rogers purchased a 20-year U.S. Treasury bond
five years ago and paid the face value of $4,000. The bond
paid 4.15 percent annual interest. After five years, she
sold the bond for $4,075.
a. What is the annual interest amount for the bond?
b. What is the total interest Emily earned during the five-
year period?
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