What would be the effective interest rate of your investment

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Reference no: EM131002450

You bought a GMC bond for $50,000 on August 1, 2003, which redeems at par value on July 31, 2009. The stated bond rate is 6% per year and the interests are compounded (paid) monthly. You have received 15 payments and you need (MUST) to sell the bond at that moment. An investor is willing to buy the bond but he/her wants to have a minimum return on his investment of 10%, what should be the selling price of your bond? What would be the effective interest rate of your investment if you sell the bond at that price?

Reference no: EM131002450

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