Suppose the U.S. Treasury offers to sell you a bond for $557.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this bond at the offer price?

a. 11.66%

b. 13.77%

c. 12.65%

d. 11.17%

e. 12.41%

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