Six $20 000, 2% Bonds with Interest Payable Semi-Annually and Redeemable

Six $20 000, 2% bonds with interest payable semi-annually and redeemable at par are purchased 18.5 years before maturity. Find the premium or discount and the purchase price if the bonds are bought to yield 5.9%.

A) $56 268.82 premium
B) $56 268.82 discount
C) $12 011.81 premium
D) $8711.47 discount
E) $12 011.81 discount

Correct Answer:

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