James Corporation is planning to issue 504000 worth of 10 pe

James Corporation is planning to issue $504,000 worth of 10 percent bonds that mature in 10 years. Interest payments are made each June 30 and December 31. All of the bonds will be sold on January 1, 2014.

Solution

Amount of bond issued= 504000

ROI = 10%

Tenure = 10 years

Equal half yearly interest works out to be 6660.40(6)

= 39962.40

Interest paid halfyearly

Hence amount of interest to be paid every half year =