Assuming the straight-line method of amortization is used,the average yearly interest expense on a $250,000,11 percent,20-year bond issued at 94 would be

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The bond was issued at 94, meaning it was issued at 94% of its face value, so the issue price is $250,000 * 94% = $235,000. The discount on the bond is $250,000 - $235,000 = $15,000. This discount is amortized over the life of the bond (20 years), so the annual amortization is $15,000 / 20 = $750. The bond pays 11% interest annually, so the annual interest payment is $250,000 * 11% = $27,500. The average yearly interest expense, including the amortization of the discount, is $27,500 (interest payment) + $750 (amortization of discount) = $28,250.

Assuming the Straight-Line Method of Amortization Is Used,the Average Yearly