What is the total amount of interest expense

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Reference no: EM132967011

Question - The following information is used to answer question:

Bonds: $3,000,000 Par Value

Semiannual Interest Payments Three-Year Life

Annual Contract Rate: 12%

Annual Market Rate: 10%

1. What is the price of the bond?

A. $3,152,270.76

B. $3,187,305.54

C. $3,215,852.37

D. $3,330,744.36

2. What is the amount of the bond premium?

A. $330,744.36

B. $187,305.54

C. $152,270.76

D. $215,852.37

3. What is the semi-annual cash payment to the bondholder?

A. $150,000

B. $160,000

C. $170,000

D. $180,000

4. What is the total amount of interest expense over the life of the bond?

A. $927,729.24

B. $945,756.32

C. $955,798.51

D. $963,877.98

Reference no: EM132967011

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