A well-known industrial firm has issued $1000 bonds that carry a 4% nominal annual interest, rate paid

Question:

A well-known industrial firm has issued $1000 bonds that carry a 4% nominal annual interest, rate paid semiannually. The bonds mature 20 years from now, at which time the industrial firm will redeem them for $1000 plus the terminal semiannual interest payment. From the financial pages of your newspaper you learn that the bonds may be purchased for $715 each ($710 for the bond plus a $5 sales commission). What nominal annual rate of return would you receive if you purchased the bond now and held it to maturity 20 years hence?

Bonds
When companies need to raise money, issuing bonds is one way to do it. A bond functions as a loan between an investor and a corporation. The investor agrees to give the corporation a specific amount of money for a specific period of time in exchange... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...