If $500,000,6% bonds are issued on January 1 and pay interest semiannually,the amount of the interest payment on July 1 will be $15,000.

Question

Quizplus · Accepted Answer

Since the bonds have a face value of $500,000 and a coupon rate of 6%, the annual interest payment would be $500,000 * 6% = $30,000. Since this is paid semiannually, the interest payment on July 1 would be half of the annual payment, which is $30,000/2 = $15,000. Therefore, the statement is true.

If $500,000,6% Bonds Are Issued on January 1 and Pay