An investment of $7,800 made March 31, 2001 pays $700 at the end of every six months for five years and pays $10,000 on March 31, 2006. What rate of interest was being earned every six months?
2 answers
700/7800 = 0.09874 = 9.87%
You need to consult a "yield to maturity" formula. I get about 23% annual rate.