A $100,000 5-Year 7% Bond Is Issued on January 1

question 28

Multiple Choice

A $100,000 5-year 7% bond is issued on January 1, 2020. The bond pays interest annually. The market rate is 5%. What is the selling premium or discount on the bonds, rounded to nearest dollar?

• A)$8,659 premium
• B)$8,200 premium
• C)$8,659 discount
• D)$8,200 discount

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Definitions:

Renewable Sources

Sources of energy that are naturally replenished on a human timescale, such as sunlight, wind, and water flows.

Phasing

The process of implementing or carrying out activities or projects in stages over time.

Renewable Energy Sources

Forms of energy that can be regenerated and are considered environmentally friendly, such as solar, wind, hydroelectric, and geothermal energy.

National Security

Measures and policies implemented by a state to ensure its survival, safety, and interests in the face of external and internal threats.