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Suppose the U.S. Treasury offers to sell you a bond for $3,000. No payments will be made until the bond matures 10 years from now,
Suppose the U.S. Treasury offers to sell you a bond for $3,000. No payments will be made until the bond matures
10 years from now, at which time it will be redeemed for $5,600. What interest rate would you earn if you bought
this bond at the offer price?
| a. | 7.47% |
| b. | 5.41% |
| c. | 6.44% |
| d. | 6.25% |
| e. | 7.92% |
You plan to invest in securities that pay 11.6%, compounded annually. If you invest $5,000 today, how many
years will it take for your investment to grow to $9,140.20?
| a. | 6.10 |
| b. | 4.73 |
| c. | 6.43 |
| d. | 4.18 |
| e. | 5.50 |
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