问题如下：
When market interest rate is 7%, a company issues a $1 million bond with maturity of 3-year, a 5% coupon rate, and annual interest payments.
Which of the following statements is the most correct?
选项：
A.The total interest expense reported by the issuer over the life of the bond will be $150,000.
B.The total interest expense reported by the issuer over the life of the bond will be $202,486.32.
C.The total interest expense reported by the issuer over the life of the bond will be $52,486.32.
解释：
B is correct.
Method 1:
The sum of Interest expenses=$66,325.96+$67,468.77+$68,691.59=$202,486.32
Method 2:
Coupon payments + discount interest = coupon payments + (face value - issue value)= $150,000 + ($1,000,000 - $947,513.68) = $202,486.32
.
答案的解释中第一年的beginning book value是如何算的？
interest expense = beginning book value * market interest rate
