Discount-Mart issues $10 million in bonds on January 1, 2021. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds?

A. 3%.

B. 4%.

C. 6%.

D. 8%.

option C is correct

annual rate of interest on the bonds is 6%

Explanation:

Given data

issue = $10 million

time = 10 year

to find out

annual rate of interest on the bonds

solution

we know bond issue $10 million

so in 10 year

issue 2 time that is june and december

so rate will be here

rate = ($300,000/$10,000,000) x 2 payments per year

so rate = 6%

hence annual rate of interest on the bonds is 6%

option C is correct