interest per year @ 4% for $ 900,000 = $ 36,000
One time selling fee 48000 / No of years (14) (per year) = $ 3,429
Annual mailing and record keeping expense = $ 66,522
Total expenses for one yar = $ 105,951
Issue price of bonds = $ 900,000
True rate of interest the company is paying = 105951/900000 * 100
= 11.772 %
A company sold a $900,000 issue of bonds with a 14-year life, paying 4% interest per...
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