You have purchased a $5\%,$ $$5,000$ bond for $$4,000.$ The interest was payable

quarterly, and the bond$$s maturity was $20$ years. You kept the bond for only $8$ years and sold

for $$3,850$ immediately after the $32$

nd interest payment was received.

a$)$ What nominal and effective rates of return per year were made on this investment?

b$)$ What is the nominal and effective rates of return per year obtained by the person that

purchased the bond from you at the end of the $8$th year if he keeps it till the maturity period