On January 1 , 2 0 x 1 , SALIENT PROMINENT Co issued 1 , 0 0 0 , P 4 , 0 0 0 , 1 2 , 3 year bonds for F 4 , 4 1 2 , 3 3 6 Principal is due on December 3 1 , 2 0 x 3 but interests are due annually every year end In addition, SALIENT incurred bond issue cost of P 2 1 3 , 3 8 8 What is the effective interest rate on the bond issue

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On January 1 , 2 0 x 1 , SALIENT PROMINENT Co . issued 1 , 0 0 0 , P 4 , 0 0

On January

1, 20

1,

SALIENT PROMINENT Co

.

issued

1, 000,

4, 000, 12 %, 3 -

year bonds for F

4, 412, 336 .

Principal is due on December

31, 20

3

but interests are due annually every year

-

end. In addition, SALIENT incurred bond issue cost of P

213, 388 .

What is the effective interest rate on the bond issue?

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