What would be the total interest cost of the bonds over their full term?
A)$1,359,033.
B)$4,640,967.
C)$6,000,000.
D)$7,359,033.($300,000 2 10) + ($10,000,000 $8,640,967) = $7,359,033

Question

Quizplus · Accepted Answer

We can calculate the total interest cost by multiplying the interest rate by the principal and then multiplying that amount by the number of years. For the $300,000 bond, the total interest cost would be ($300,000 x 0.10 x 10) = $300,000. For the $10,000,000 bond, the total interest cost would be ($10,000,000 x 0.08640967 x 10) = $8,059,033. Adding these two amounts together gives us a total interest cost of $7,359,033 (option D).

What Would Be the Total Interest Cost of the Bonds