Question: On April 12, 1988, an engineer bought a $1000 bond of an American airline for $875. The bond paid 6% on its principal amount of

On April 12, 1988, an engineer bought a $1000 bond of an American airline for $875. The bond paid 6% on its principal amount of $1000, half in each of its April 1and October 1 semiannual payments; it repaid the $1000 principal sum on October 1, 2001. What nominal rate of return did the engineer receive from the bond if he held it to its maturity (on October 1, 2001)?

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