What is the total amount of interest paid over the life of this bond?

My professor handed us a take home quiz but I don’t understand how to do it. It’s probably super easy…

My professor handed us a take home quiz but I don’t understand how to do it. It’s probably super easy but here are the questions.

 

1. A ten year, 8 percent, 1,000 dollar bond is issued at 96.

a. How much does this bond sell for?

 

B. Was the market rate greater or less than 8%?

 

C. What is the total amount of interest paid over the life of this bond?

 

D. What is the total amount of interest expense recorded on this bond?

 

2. A ten year, 8 percent, 1000 dollar bond is issued at 102 3/4.

 

a. How much did this bond sell for?

 

B. Was the market rate of interest greater or less than 8%?

 

C. What is the total amount of interest paid over the life of this bond?

 

D.  What is the total amount of interest expense recorded on this bond

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