A major airline is planning to purchase new airplanes. It wants to borrow $800 million by
issuing bonds. The bonds are for a 10-year period with simple interest computed quarterly at
a rate of 2 percent per quarter. Interest is to be paid each quarter to bondholders.
How much (in millions) will the airline have to pay in quarterly interest? $
million
How much interest (in millions) will it pay over the 10-year period? $ million