Question

A company issues 9%, 5-year bonds with a par value of $140,000 on January 1 at a price of $145,678, when the market rate of interest was 8%. The bonds pay interest semiannually. The amount of each semiannual interest payment is:

Answer 1

The amount of each semiannual interest payment is: $6,300

Step-by-step explanation:

The semiannual interest payment of the bond is also known as the coupon payment of the bond and is calculated as follows :

Semiannual interest payment = ($140,000 × 9%) ÷ 2

= $6,300