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A municipal bond has a face value of $5,000 and pays 6% tax free interest compounded semiannually and matures in 10 years. If an investor

A municipal bond has a face value of $5,000 and pays 6% tax free interest compounded semiannually and matures in 10 years. If an investor wants to earn 8% interest per year compounded semiannually, how much would she pay for the bond ___________? If she pays $5,050 for the bond, what would be the annual effective return on the bond ______________?(ANS. $X,XXX and X.XX%)

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