Morgan Company issues 10%, 20-year bonds with a par value of $850,000 that pay interest semiannually. The current market rate is 9%. The amount paid to the bondholders for each semiannual interest payment is:
Answer Choices:
1) $425,000
2) $42,500
3) $76,500
4) $85,000
5) $38,250

Money held at a bank is referred to as a deposit in the world of finance.
A deposit is a transaction in which money is transferred to another party for safekeeping. However, a deposit can also refer to a sum of money used as security or interest for the delivery of an item.
A deposit might have two different meanings. One type of deposit entails the transfer of money to a third party for safekeeping.
According to this definition, a deposit is cash that an investor deposits into a savings or checking account with a bank or credit union.
The individual or entity who made the deposit retains ownership of the interest, and they are free to withdraw it whenever they like, move it to another person's account, etc.

Amount of interest paid to the Bond Holder for every half yearly

Interest = 850,000x 10% x 6/12 = $42,500

Hence, The amount paid to the bondholders for each semiannual interest payment is $42,500.

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