On April 12, 1988, an engineer bought a $1000 bond of an American airline for $875. The

Question:

On April 12, 1988, an engineer bought a $1000 bond of an American airline for $875. The bond paid 6% on its principal amount of $1000, half in each of its April 1and October 1 semiannual payments; it repaid the $1000 principal sum on October 1, 2001. What nominal rate of return did the engineer receive from the bond if he held it to its maturity (on October 1, 2001)?

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...