Sykora Corp. sells $540,000 of bonds to private investors. The bonds are due in 5 years, have a 6% coupon rate and interest is paid semiannually. Sykora received $490,222 for the bonds at issuance.

The effective rate on these bonds is:

Select one:

a.4%

b.8%

c.None of these are correct.

d.10%

e.5%