A 30-year, $10,000 strip bond was originally issued at 5% compounded semi-annually. Ten years later the original purchaser sold the bond at the prevailing market rate at that time which was 7% compounded semi-annually. How much profit did the original purchaser earn over the 10 years?
A) $(1,198) Loss
B) $253 Profit
C) $806 Profit
D) $1,451 Profit
E) $2,000 Profit
Correct Answer:
Verified
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