The total interest cost on thirty-nine,ten-year,6 percent,$1,000 bonds that are issued at 98 is

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The correct answer is A because the total interest cost is $24,180. The total face value of the bonds is $39,000 (39 x $1,000). The bonds were issued at 98, which means that they were sold for 98% of their face value. Therefore, the total proceeds from the sale of the bonds were $38,220 (39,000 x 0.98). The annual interest payment on the bonds is $2,340 (39,000 x 0.06). The total interest cost over the 10-year life of the bonds is $24,180 (2,340 x 10).

The Total Interest Cost on Thirty-Nine,ten-Year,6 Percent,$1,000 Bonds That Are