How much will he be taxed on the investment after two year

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Reference no: EM132020565

Peter wants to buy a 3-year, AA-rated, $1000 par value, zero-coupon bond being sold by Stark

Industries. The yield to maturity on the bonds is estimated to be 8% and bond is semiannual bond.

A) How much would he have to pay for it?

B) How much will he be taxed on the investment after 2 year, if his marginal tax rate is 20% ?

Reference no: EM132020565

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