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124. Semiannual (Aa'a) and mature payment bonds (20 years) with a conditional return (not EAR) of 9% on the company's bonds. The treasurer of your business is thinking of selling quarterly payment bonds for approximately $1,000 per value. You were required to calculate in dollars how much the corporation will have to pay in quarterly interest to provide the same effective annual rate (EAR) as on a 20-year, semi-annual payout bond. What will be the dollar interest payment on a quarterly basis? a. $45.00 b. $25.00 c. $22.25 d. $27.50 e. $23.00

124. Semiannual (Aa'a) and mature payment bonds (20 years) with a conditional return (not EAR) of 9% on the company's bonds. The treasurer of your business is thinking of selling quarterly payment bonds for approximately $1,000 per value. You were required to calculate in dollars how much the corporation will have to pay in quarterly interest to provide the same effective annual rate (EAR) as on a 20-year, semi-annual payout bond. What will be the dollar interest payment on a quarterly basis? a. $45.00 b. $25.00 c. $22.25 d. $27.50 e. $23.00

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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124. Semiannual (Aa'a) and mature payment bonds (20 years) with a conditional return (not EAR) of 9% on the company's bonds. The treasurer of your business is thinking of selling quarterly payment bonds for approximately $1,000 per value. You were required to calculate in dollars how much the corporation will have to pay in quarterly interest to provide the same effective annual rate (EAR) as on a 20-year, semi-annual payout bond. What will be the dollar interest payment on a quarterly basis?

a. $45.00
b. $25.00
c. $22.25
d. $27.50
e. $23.00

 

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