Final answer:
To compute the total proceeds from a bond issue of 1,000 bonds with a face value of $5,000 each sold at 98%, multiply 98% of the face value by the number of bonds. This results in total proceeds of $4,900,000.
Step-by-step explanation:
To compute the total proceeds from a bond issue when an organization issues 1,000 bonds with a face value of $5,000 each at 98%, you must follow these steps:
Calculate the individual bond price by taking 98% of the face value.
Multiply the individual bond price by the total number of bonds issued to find the total proceeds.
To perform the calculation:
98% of $5,000 is $4,900 ($5,000 x 0.98).
Multiplying $4,900 by 1,000 bonds gives you $4,900,000.
Therefore, the total proceeds from the bond issue rounding to the nearest dollar would be 4900000.