On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.To calculate the amount of cash that Nadir received,you must find ________.

Question

Quizplus · Accepted Answer

To calculate the amount of cash that Nadir received, we need to find both the present value of the principal ($1,000,000) and the present value of the annual interest payments ($60,000). This can be done by using the present value formula for a single amount and the present value formula for an annuity, respectively. Therefore, choice D is the best answer.

On January 1,2011,Nadir Company Issued $1,000,000 of 6%,20-Year Bonds When