Final coupon payment and the redemption vale

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Reference no: EM131087773

Sean saves enough money to buy a ten-year 1000 par value bond with 6% coupons, paid semi-annually. At the given price, the nominal yield is 6%, compounded semi-annually. As san receives the coupon payments, he immediately puts it into an account earning an effective annual rate of i. At the end of 10 years , immediately after he receives the final coupon payment and the redemption vale, sean has eared an annual effective rate of 7% on the bond investment. Find i.

Reference no: EM131087773

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