Final answer:
To calculate the total interest expense for Arc Corp's bond, both cash interest payments and amortization of the discount must be considered. However, without the issue price of the bond, which is necessary to determine the discount, a complete answer cannot be provided.
Step-by-step explanation:
The total amount of interest expense for Arc Corp over the life of the 3-year bond, which pays semi-annual interest, and was issued at a discount because the market interest rate of 10% was higher than the coupon rate of 8%, can be calculated using the effective interest rate method. However, additional information such as the bond's issue price is needed to calculate the total interest expense accurately. This calculation would include both the cash interest payments and the amortization of the bond discount over the life of the bond.
As this question requires additional data to provide a precise answer, and since the question as stated doesn't provide the issuance price which is necessary to find the total interest expense, an answer cannot be given assuming the company holds the bonds until maturity and pays interest semi-annually. A standard formula to calculate interest expense over the life of a bond includes the interest payments and the amortization of any discount or premium, but exact numbers cannot be provided without more details about the bond's issuance conditions.