A company issues 10%, 6-year bonds with a par value of $230,000 on January 1 at a price of $240,486, when the market rate of interest was 9%. The bonds pay interest semiannually. The amount of each semiannual interest payment is:

the amount of each semiannual interest payment is $11,500

Explanation:

The computation of the amount of each semiannual interest payment is shown below:

= Par value × rate of interest × given months ÷ total months

= $230,000 × 10% × 6 months ÷ 12 months

= $11,500

Hence, the amount of each semiannual interest payment is $11,500

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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