Based on the stated annual interest rate and the face value of the bond, the semiannual payments will be $1,000,000.
How can the semiannual interest payment be found?
The formula to find the semiannual payment is:
= (Face value x Stated annual interest rate) / 2 semi-annual periods per year
Solving gives:
= (50,000,000 x 4%) / 2
= 2,000,000 / 2
= $1,000,000
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