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Serggg [28]
4 years ago
8

On January 1, 2017, Boston Enterprises issues bonds that have a $2,050,000 par value, mature in 20 years, and pay 8% interest se

miannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months
Business
1 answer:
kari74 [83]4 years ago
7 0

Answer:

Boston will  pay (in cash) to the bondholders every six months $125,146.31.

Explanation:

The interest paid in cash PMT, can be calculated as follows :

PV = $2,050,000

N = 20 × 2 = 40

R = 8%

FV = $2,050,000

P/yr = 2

PMT = ?

Using a financial calculator to enter the above data concerning the bond, the payments (PMT) every six months is $125,146.3062 or $125,146.31.

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Explanation:

a.

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please see attachment for the excel solutions.

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