On April 1, 2018, Ellucian Corporation invested in the bonds issued by the City of Westminster on January 1, 2018. These 10-year, $300,000 bonds pay interest of 2% with semiannual payments every June 30 and December 31. Ellucian paid par value plus accrued interest. What is the total amount paid by Ellucian for the City of Westminster bonds?

Question

Quizplus · Accepted Answer

Ellucian paid the par value of $300,000 plus accrued interest for three months (January 1 to April 1) at 2% annual interest, which is $300,000 * 2% * (3/12) = $1,500. Total paid = $300,000 + $1,500 = $301,500.

On April 1, 2018, Ellucian Corporation Invested in the Bonds