Question

Holiday Brands issued $22 million of 7%, 30-year bonds for $19.5 million. What is the amount of interest that Holiday will pay semiannually to bondholders?

Answer 1

amount = $770,000

Step-by-step explanation:

given data:

face amount = $22 million

annual rate = 7%

fraction of one single year
`= (6)/(12)`

amount of interest paid by holiday brand = face amount * annual rate* fraction of year

`amount = 22,000,000*0.07*(6)/(12)`

amount = $770,000