Kramer Manufacturing wants to issue $50 million in bonds and pay interest at the rate of 5% semiannually on a face value of $1,000. Kramer will need to issue ________ bonds and pay ________ per bond in interest every six months.

Question

Quizplus · Accepted Answer

Kramer needs to issue 50,000 bonds because $50,000,000 / $1,000 = 50,000. The interest per bond every six months is $25 because 5% annual interest on $1,000 is $50, and half of that is $25.

Kramer Manufacturing Wants to Issue $50 Million in Bonds and Pay