Question

Grand Rapids, MI has plans to issue new 20 year annual bonds in order to install new street lamps throughout the city. These bonds have been approved to tax residents in order to cover the expense. Which form of bond did the Grand Rapids issue?

Answer 1

The form of bond that Grand Rapids, MI issued to fund the installation of new street lamps throughout the city is known as "annual bonds". These bonds are issued for a period of 20 years and are paid off through an annual tax imposed on the residents of Grand Rapids.

Annual bonds are a type of long-term debt instrument that is issued by governments and municipalities to finance capital projects or infrastructure improvements. In this case, Grand Rapids is using the funds raised from the sale of these bonds to cover the cost of installing new street lamps.

The key feature of annual bonds is that they are repaid over a fixed period of time, usually in annual installments. In the case of Grand Rapids, the bondholders will receive regular interest payments along with the principal amount over the 20-year period.

By issuing annual bonds, Grand Rapids is able to spread out the cost of the street lamp installation project over a longer period of time, making it more manageable for the city's budget. Additionally, the annual tax imposed on the residents ensures that the funds necessary to repay the bonds are available.

Overall, the issuance of annual bonds by Grand Rapids, MI allows the city to finance the installation of new street lamps while distributing the financial burden among the residents through an annual tax.

Step-by-step explanation:

Answer 2

Grand Rapids, MI plans to issue 20-year general obligation bonds funded by tax revenue to finance new street lamps.

Step-by-step explanation:

The city of Grand Rapids, MI plans to issue new 20-year annual bonds to cover the costs of installing new street lamps throughout the city. These bonds will be paid for by taxing the residents, which suggests that these bonds are likely a form of municipal bonds, specifically general obligation bonds (GO bonds). General obligation bonds are typically backed by the full faith and credit of the issuing municipality, and the repayment relies on taxation.