On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%....
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________.
- $120,000
- $60,000
- $7,500
- $15,000
On October 1 a company sells a 3-year, $2,500,000 bond with an 8% stated interest rate. Interest is paid quarterly and the bond is sold at 89.35. On October 1 the company would collect ________.
- $200,000
- $558,438
- $2,233,750
- $6,701,250
Homework Answers
1)
Value = $250,000
Interest rate = 6%
Interest Payment = $250,000 * 6% = $15,000
Option 'D' is correct
2)
Value = $2,500,000
Interest rate = 8%
Sale price = $89.35
Company would collect = $2,500,000 * 8% * 89.35 / 100
Company would collect = $$2,233,750
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