On January 1, 2012, PT Berdikari purchased bonds (maturity date January 1, 2017) which issued by PT Angkasa at a fair value of Rp. 9 billion. The face value of the bonds is 10 billion with a nominal interest rate of 7% which is paid every 31 December. Based on calculations accountant of PT Berdikari, the effective interest rate obtained from the investment in the bonds is 9.25%.

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To calculate the effective interest rate for an investment in bonds you can use the following formul... View the full answer