If Trundell Co. Ltd. issued 12-year debt by way of a zero coupon (strip) bond with a nominal value of $15,000,000 and received $6,660,200 at issue, what interest rate did Trundell pay on its bond?

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The interest rate can be found using the formula for the present value of a zero-coupon bond, which is $PV = \frac{FV}{(1 + r)^n}$, where PV is the present value ($6,660,200), FV is the future value ($15,000,000), r is the interest rate, and n is the number of periods (12 years). Solving for r gives an interest rate of approximately 7.0%.