You are planning to buy a corporate bond with a seven-year maturity that pays 7 percent coupon interest. The bond is priced at $108,500 per $100,000 par value. You expect to sell the bond in two years when a similar-risk five-year bond is priced to yield 7.2 percent annually to maturity. Assuming that you can reinvest all cash flows at an 8 percent annual rate (4 percent semiannually), calculate your expected total return over the two-year holding period.

Please solve using a ba II plus time value of money calculator and show inputs for N,IY,PMT,PV,FV. I need to see the process to solve this.

Hence, the expected total return on this investment is 1.25% semiannually or 2.5% annually. (This should be the answer)