You purchased a bond at a price of $1,400. In 25 years when the bond matures, the bond will be worth $10,000. It is exactly 17 years after you purchased the bond and you can sell the bond today for $7,300. If you hold the bond until it matures, what annual rate of return will you earn from today?
You purchased a bond at a price of $1,400. In 25 years when the bond matures, the bond will be worth $10,000. It is exactly 17 years after you purchased the bond and you can sell the bond today for $7,300. If you hold the bond until it matures, what annual rate of return will you earn from today?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 11P
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Question
![You purchased a bond at a price of $1,400. In 25 years when the bond matures, the bond will be worth $10,000. It is exactly 17 years after you
purchased the bond and you can sell the bond today for $7,300. If you hold the bond until it matures, what annual rate of return will you earn from
today?
Multiple Choice
O
3.6 percent
4.0 percent
8.2 percent
10.2 percent
4.5 percent](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3437af43-6a1b-4faa-a426-da58e71127ca%2F8573966a-14a1-4f2a-b443-d1c2fa3f51b3%2Fncyampw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You purchased a bond at a price of $1,400. In 25 years when the bond matures, the bond will be worth $10,000. It is exactly 17 years after you
purchased the bond and you can sell the bond today for $7,300. If you hold the bond until it matures, what annual rate of return will you earn from
today?
Multiple Choice
O
3.6 percent
4.0 percent
8.2 percent
10.2 percent
4.5 percent
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