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Bleay's Squash Ltd. sold $1,000,000 of 4.0%, five-year bonds for $1,022,753 when the market rate of interest was 3.5%. Interest is payable semi-annually. The costs

Bleay's Squash Ltd. sold $1,000,000 of 4.0%, five-year bonds for $1,022,753 when the market rate of interest was 3.5%. Interest is payable semi-annually. The costs directly associated with issuing the bonds totaled $25,000. What was the effective rate of interest per period on this bond issue?

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