Pay for one of municipal bond if bond is held until maturity

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Reference no: EM131590121

A city is spending $21million on a new sewage system. To cover the cost, the city will issue bonds with a face value of $2,500, paying 6.75% interest per year, and redeemable at face value in 16 years. If an investor’s personal MARR is 9.5% per year, what is the maximum price the investor can pay for one of the municipal bonds if the bond is held until maturity? (Enter your answer as a number without the dollar $ sign.)

Reference no: EM131590121

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