What is the rate of return for an investor who pays $1054.47 for a three-year bond with

Question:

What is the rate of return for an investor who pays $1054.47 for a three-year bond with a 7% coupon and sells the bond one year later for $1,037.19?

A) 5.00%

B) 5.33%

C) 6.46%

D) 7.00%

Could you please show your work on how to derive at the correct answer? I prefer to be showed the solution using a financial calculator if possible.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...