What is the annual stated interest rate on the bonds?
A)3.5%
B)6%
C)7%
D)None of these is correct.This is the annual cash interest paid ($14,000), divided by the maturity (face) value of $200,000.

Question

Quizplus · Accepted Answer

The annual stated interest rate is calculated by dividing the annual cash interest paid ($14,000) by the maturity (face) value of the bond ($200,000), which results in 7%.

What Is the Annual Stated Interest Rate on the Bonds