Problem

An engineer can purchase a corporate bond for $10,000 that pays $200 in interest, semi-ann...

An engineer can purchase a corporate bond for $10,000 that pays $200 in interest, semi-annually, for five years (ten payments). At the end of five years, in addition to the last $200 interest payment, the original $10,000 investment is repaid. Draw the cash flow diagram for the engineer. Is this investment equivalent to a simple annual interest of 5% that can be earned in an alternative investment?

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