17% bonds with a value of 30,000 are due 2014. These bonds were issued on Sept 31, 2010, and mature in four years. The face value of the bond is…

1.17% bonds with a value of 30,000 are due 2014. These bonds were issued on Sept 31, 2010, and mature in four years. The face value of the bond is 30,500.

  1. If I pay interest on these bonds annually, how much interest will I pay each year?
  2. What proceeds did I receive when I issued these bonds?
  3. What annual effective interest rate will I pay on these bonds over the four years to maturity? (To answer this question I know I have to calculate the rate at which the issuance proceeds received exactly equal the annual interest payments plus the repayment of the face value at maturity)

Get 20% discount on this paper. Use coupon: GET20

Posted in Uncategorized