Melvin owns 10 20-year corporate bonds, each with a face value of $1,000. If the bonds pay an interest rate of 7.5%, how much total interest will Melvin earn before taxes in one year on this investment?

Question

Quizplus · Accepted Answer

Each bond pays 7.5% interest on a $1,000 face value, which is $75 per bond per year. With 10 bonds, Melvin earns $75 x 10 = $750 in total interest per year.

Melvin Owns 10 20-Year Corporate Bonds, Each with a Face