What effective rates of return per year will purchaser make, Microeconomics

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What effective rates of return per year will purchaser make

Problem

Contributed by Meenakshi Sundaram, Tennessee Tech University

A 12%, $50,000 bond is offered for sale at $45,000. If the bond interest is payable monthly and the bond matures in 20 years, what nominal and effective rates of return per year will the purchaser make on the investment?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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