Ado is Corporation issued 10year 7 bonds with a par value of

Ado is Corporation issued 10year, 7% bonds with a par value of S00000 Interests paid semiannually The market rate on the issue date was 3% Adonis recerved S107441 in cash proceeds. Which of the following statements is true? donis must pay $107,441 at maturity and no interest payments Adonis must pay $107 441 at maturity plus 20 inserest peyments of $3.500 esch Adonis must pey $100,000 at maturity and no interest payments adonis must pey 5100,000a mury pus 20rsee of 53.500 c B N M Ctri

Solution

Each semi-annual interest payment:

= $100,000×7%/2

= $3,500

Par value is paid at maturity when bonds are matured.

Hence, correct option is “Adonis must pay $100,000 at maturity plus 20 intertest payments of $3,500 each”