Discount-Mart issues $10 million in bonds on January 1, 2021…

Discount-Mart issues $10 million in bonds on January 1, 2021. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: Date Cash Paid Interest Expense Increase in Carrying Value  Carrying Value 01/01/2021 $ 8,640,967 06/30/2021 $ 300,000 $ 345,639 $ 45,639 8,686,606 12/31/2021 300,000 347,464 47,464  8,734,070 06/30/2022 300,000 349,363 49,363  8,783,433 12/31/2022 300,000 351,337 51,337  8,834,770   What is the stated annual rate of interest on the bonds?

Congratulations! You’ve just won the lottery. Your two optio…

Congratulations! You’ve just won the lottery. Your two options are: Take $60,000 today. Take $14,000 at the end of every year, for next six years, assuming a discount rate of 12%. Which option are you better off choosing and by how much in today’s dollars?