Question

For the given corporate bond, whose annual simple interest rate is provided, find the semiannual simple interest

payment and the total interest earned over the life of the bond. Assume 365 days in a year.
$5900 Company A, 30-year bond, 5.177%
The semiannual interest on the corporate bond is $
(Round to the nearest cent as needed.)

Answer 1

I can help you with the corporate bond question. To find the semiannual simple interest payment, you need to divide the annual simple interest rate by 2 and multiply it by the face value of the bond. So, we have:

- Semiannual simple interest payment = (5.177% / 2) * $5900

- Semiannual simple interest payment = 0.025885 * $5900

- Semiannual simple interest payment = $152.72

The semiannual interest on the corporate bond is **$152.72**.

To find the total interest earned over the life of the bond, you need to multiply the semiannual simple interest payment by the number of payments in 30 years. Since there are two payments per year, the number of payments is 30 * 2 = 60. So, we have:

- Total interest earned = $152.72 * 60

- Total interest earned = $9163.20

The total interest earned over the life of the bond is **$9163.20**.

I hope this helps you with your finance homework. If you have any other questions, please feel free to ask me

Explanation: