Answer:
The interest amount is $29600.
Explanation:
Below are the following given values:
The par value of bonds that Morgan company issues = $740000
Interest paid = semi annually
Current interest rate = 7%
Now we have to find the total amount of interest at 8% that is compounded semiannually.
Below is the calculation of the interest amount.
Amount of interest for each semi-annual period: = face value × Coupon rate × 0.5
Here we multiply with 0.5 because interest is semi-annually.
Total interest = $740,000 × 8% × 0.5
Total interest = $29,600
