The bonds will mature and be redeemed at face value

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Reference no: EM131300012

Twenty $1,000 municipal bonds are offered for sale at $18,000. The bond coupon rate is 6% per year payable semiannually. The bonds will mature and be redeemed at face value 5 years from now. If you purchase the bonds, the first premiums will be received 6 months from today. You have decided that you will invest $18,000 in the bonds if your effective annual yield is at least 8.16%. Will you buy these bonds? Why or why not?

The book being used: Fundamentals of Engineering Economic Analysis 1st Edition Wiley

Authors: White, Grasman, Case, LaScola Needy, & Pratt.

Reference no: EM131300012

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