2) An individual purchased a $80,000 bond on its issue date, September 1, 2023. The bond pays interest at maturity, August 31, 2025, at a rate of 5% compounded annually. What amount of interest must be included in income in 2023 and 2024, respectively? A $4,000 and $4,200 B $4,200 and $4,000 C $4,000 and $4,000 D $4,200 and $4,200 E None of these

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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2) An individual purchased a $80,000 bond on its issue date, September 1, 2023. The
bond pays interest at maturity, August 31, 2025, at a rate of 5% compounded annually.
What amount of interest must be included in income in 2023 and 2024, respectively?
A $4,000 and $4,200
B $4,200 and $4,000
C $4,000 and $4,000
D $4,200 and $4,200
E None of these
Transcribed Image Text:2) An individual purchased a $80,000 bond on its issue date, September 1, 2023. The bond pays interest at maturity, August 31, 2025, at a rate of 5% compounded annually. What amount of interest must be included in income in 2023 and 2024, respectively? A $4,000 and $4,200 B $4,200 and $4,000 C $4,000 and $4,000 D $4,200 and $4,200 E None of these
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