Nike issued 15-year, 9% bonds with a par value of $200,000. Interest is paid sem

Question

Nike issued 15-year, 9% bonds with a par value of $200,000. Interest is paid semiannually. The market rate on the issue date was 8.5%. Nike received $216,776 in cash proceeds. Which of the following statements is true? a)Nike must pay $200,000 at maturity plus 15 interest payments of $8,000 each. b)Nike must pay $216,776 at maturity and no interest payments. c)Nike must pay $200,000 at maturity and no interest payments. d)Nike must pay $216,776 at maturity plus 30 interest payments of $9,000 each. e)Nike must pay $200,000 at maturity plus 30 interest payments of $9,000 each.

Explanation / Answer

9 percent , semiannual => 15x2 = 30 interest payments and 9/100 * 200,000 = 18000 per year => 9,000 semiannually So the answer is D) Hope you liked my simple solution :)

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