A municipality needs funding for upcoming infrastructure $($water and sewer line$)$ repair or replacement. They issue a series of $$1,000,6\%$ semiannual, $9-$year bonds. The bonds are initially sold at a discount for $$910.$

Part a

Your answer is correct.

If you buy a bond and sell it for $$795$ immediately following the $6^{th}$ interest payment, what is your effective annual rate of return?

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$\%$

Carry all interim calculations to $5$ decimal places and then round your final answer to $2$ decimal places. The tolerance is $+-0\mathrm{.}02.$

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Attempts: $1$ of $3$ used

Part b

If you buy a bond for $$910,$ plan to sell it immediately following the ${12}^{th}$ interest payment, and want to earn $8\%$ compounded semiannually on your money, what must be the selling price?

Click here to access the TVM Factor Table calculator.

Carry all interim calculations to $5$ decimal places and then round your final answer to $2$ decimal places. The tolerance is $+-0\mathrm{.}05.$