The answer is option C - $8,750.
The bonds of 2034 have a stated interest rate of 8 3/4% x $100,000 principal amount = annual interest of $8,750. These bonds are initially offered at a discount to raise the effective yield of 9.25%.
A bond is a fixed-income instrument representing a loan given by an investor to a borrower (usually a corporate or government). A bond can be imagined as an I.O.U. between the loan provider and the borrower which includes the information about the loan and its repayments. Bonds are used by corporations, municipalities, states, and sovereign governments to finance projects and other operations. Bondholders are debtors or creditors of the issuer.
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