Problem

Pearl Company sells $1,000,000 general obligation bonds for 101. The interest rate on the...

Pearl Company sells $1,000,000 general obligation bonds for 101. The interest rate on the bonds, paid quarterly, is 5 percent. Calculate (a) the amount that the company will actually receive from the sale of the bonds, and (b) the amount of both the quarterly and the total annual cash interest that the company will be required to pay.

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