The Annual Interest Payment on Bonds

question 40

Multiple Choice

The annual interest payment on bonds:

• A)increases over the life of the bonds when bonds are issued at a discount.
• B)decreases over the life of the bonds when bonds are issued at a discount.
• C)stays constant over the life of the bonds,regardless of whether bonds are issued at par,a discount,or a premium.
• D)increases over the life of the bonds under the effective-interest method,but stays constant under the straight-line method of amortization.

---

Definitions:

U.S. Policy

Refers to the overarching strategies and stances that the United States government adopts towards domestic and international issues.

Constitutional Convention

A gathering in 1787 in Philadelphia where the Constitution of the United States was drafted, replacing the Articles of Confederation.

Bill of Rights

The first ten amendments to the United States Constitution, ratified in 1791, designed to safeguard individuals' liberties and rights against infringement by the federal government.