Shannon purchases a bond for $1,142.38. The bond matures in 3 years, and she will redeem it at its face value of $1,200. Interest premiums are paid annually. If Shannon will earn a yield of 6%/year compounded yearly, what is the bond interest rate?

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A: Solution:- Rate of return means the percentage of yield earned by holding an asset.

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A: Price of bond = 3333 Future Value of bond = 5550 N = 5 Interest rate = 6%

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A: Future value is the value of an investment or cash flow at a future point in time, based on the…