The amount of each semiannual interest payment is $5,950
Compute the amount payable semiannually as interest?
The amount of each semiannual interest payment means the amount the company, the bond issuer would pay as cash interest to bondholders every six months, which is a function of the bond coupon rate of 7%, the par value as shown below:
semiannual interest payment=coupon rate*par value*6/12
coupon rate=7%(7% bond means coupon rate is 7%)
par value=face value=$170,000
6/12 implies that the coupon payment is semiannual. not for a full year
semiannual interest payment=7%*$170,000*6/12
semiannual interest payment=$5,950
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