Asked by Azriel Gamez on Jun 22, 2024
Verified
Interest payments on 12% bonds with a face value of $20,000 and interest paid semiannually would be $2,400 every 6 months.
Face Value
The nominal value printed on a financial instrument, like a bond or stock certificate, representing its worth at issuance or maturity.
Interest Payments
Payments made to lenders as compensation for borrowing money, typically calculated as a percentage of the principal amount.
- Acquire knowledge on the determination and relevance of interest payments concerning bonds.
Verified Answer
BS
Baila SkendzielJun 29, 2024
Final Answer :
False
Explanation :
Interest payments for 12% bonds with a face value of $20,000, when interest is paid semiannually, would be $1,200 every 6 months. This is because the annual interest of 12% on $20,000 equals $2,400, and when divided by two for semiannual payments, it results in $1,200 every 6 months.
Learning Objectives
- Acquire knowledge on the determination and relevance of interest payments concerning bonds.
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