Mildred can purchase a municipal bond with a par face value, Business Economics

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Mildred can purchase a municipal bond with a par face value

Mildred can purchase a municipal bond with a par (face) value of $5000 that will mature in 31/2 years. The bond pays 8% interest compounded quarterly. If she can buy this bond for $4800, what rate of return will she earn? Contributed by Paul R. McCright, University of South Florida.

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Business Economics: Mildred can purchase a municipal bond with a par face value

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Business Economics: Mildred can purchase a municipal bond with a par face value

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