Use the Present Value and Future Value Tables Included in Appendix

question 68

Multiple Choice

Use the present value and future value tables included in Appendix 8 and on the textbook companion website.
-On January 1, 2012, Santos Hospital issued a $250,000, 10 percent, 5-year bond for $231,601. Interest is payable on June 30 and December 31. Santos uses the effective-interest method to amortize all premiums and discounts. Assuming an effective interest rate of 12 percent, approximately how much discount will be amortized on December 31, 2012?

• A) $2,230
• B) $1,480
• C) $1,396
• D) $987

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Definitions:

Median

A statistical measure representing the middle value in a set of data, where half the numbers are above and half are below.

Mean

The average value of a group of numbers, calculated by dividing the sum of all the numbers by the count of the numbers.

Frequency Distribution

a representation, often in the form of a table, that shows the number of observations within a particular range of values, used in statistics to summarize data sets.

Data Set

A collection of related sets of information that consists of separate elements but can be manipulated as a unit by a computer.