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On January 1, 2024, Morton Sales Company issued zero-coupon bonds with a face value of...

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Accounting

On January 1, 2024, Morton Sales Company issued zero-coupon bonds with a face value of $6 million for cash. The bonds mature in 10 years and were issued at a price of $3,050,100.

Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

Required:

What was the annual effective interest rate in the market when the bonds were issued?

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