The municipal bonds if bond is held until maturity

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Reference no: EM131590035

A city is spending $36million on a new sewage system. To cover the cost, the city will issue bonds with a face value of $12,500, paying 8% interest per year, and redeemable at face value in 26 years. If an investor’s personal MARR is 12% per year, what is the maximum price the investor can pay for one of the municipal bonds if the bond is held until maturity? (Answer with details and explanation.)

Reference no: EM131590035

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