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Suppose $20,000 of 8% Bonds Were Purchased on March 1,2017,for

Question 158

Multiple Choice

Suppose $20,000 of 8% bonds were purchased on March 1,2017,for a purchase price of 90.The purchasing company,whose year end is December 31,expects to hold the bonds until their maturity date five years from the date of purchase.Interest on the bonds will be paid every March 1 and September 1 until maturity.Assuming the premium or discount is amortized every interest payment using straight-line amortization,how much interest payment will be received by the investor on September 1,2017?


A) $800
B) $1,200
C) $1,000
D) $600

Correct Answer:

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