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If G&M Foods issues a $1,000 bond with an interest rate of 3.5 percent and a maturity date of January 1, 2025, G&M is agreeing to pay the bondholder __________ interest each year until January 1, 2025, when it must repay the full $1,000.

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abiolataiwo2015

G&M is agreeing to pay the bondholder the interest amount of $35 each year until January 1, 2025.

Using this formula

Interest=Bond amount× Interest rate

Where:

Bond amount=$1,000

Interest rate=3.5% or 0.035

Let plug in the formula

Interest=$1,000×0.035

Interest=$35 each year

Inconclusion G&M is agreeing to pay the bondholder the interest amount of $35 each year until January 1, 2025.

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