## Question

# A saving bond earns a variable rate of interest that can change six months, with compounding done monthly. The initial rate was 6.8% in early

A saving bond earns a variable rate of interest that can change six months, with compounding done monthly. The initial rate was 6.8% in early 2015. If that rate continues unchanged for the 3 years of the bond's duration, what is the APY (annual percentage yield) on a $10,000 bond? (Please answer in term of percentage, e.g: 2.5%, and round to 2 decimal places)

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### Contemporary Financial Management

**Authors:** R. Charles Moyer, James R. McGuigan, Ramesh P. Rao

13th edition

1285198840, 978-1285198842

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