On April 1,2013,a Company Sold $3,500,000 of Ten Year,6% Bonds

question 53

Multiple Choice

On April 1,2013,a company sold $3,500,000 of ten year,6% bonds for $2,222,400. From the proceeds,the company paid $200,000 sales commission.Interest is payable semi-annually on April 1 and October 1.What is the effective rate of interest (round to 2 decimal places) ?

• A)6.25%
• B)6.98%
• C)9.81%
• D)11.46%