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(Related to Checkpoint 5.6) (Solving for i ) Springfield Learning sold zero coupon bonds (bonds that don't pay any interest, instead the bondholder gets just
(Related to Checkpoint 5.6) (Solving for i ) Springfield Learning sold zero coupon bonds (bonds that don't pay any interest, instead the bondholder gets just one payment, coming when the bond matures, from the issuer) and received $1,200 for each bond that will pay $18,000 when it matures in 35 years. a. At what rate is Springfield Learning borrowing the money from investors? b. If Nancy Muntz purchased a bond at the offering for $1,200 and sold it 10 years later for the market price of $3,400, what annual rate of return did she earn? c. If Barney Gumble purchased Muntz's bond at the market price ($3,400) and held it 25 years until maturity, what annual rate of return would he have earned
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