Question

Holiday Brands issued $22 million of 7%, 30-year bonds for $19.5 million. What is the amount of interest that Holiday will pay semiannually to bondholders?

Answer 1

Answer:

amount  = $770,000

Explanation:

given data:

face amount = $22 million

annual rate = 7%

fraction of one single year $= \frac{6}{12}$

amount of interest paid by holiday brand =  face amount * annual rate* fraction of year

$amount = 22,000,000*0.07*\frac{6}{12}$

amount  = $770,000