If $1,000,000 of 8% bonds are issued at 101, the amount of cash received from the sale is

Solution:

Given, face value = $1,000,000

Points = 101

Amount of cash received from the sale = face value × points/100

Cash received = 1000000 × 101/100

= 10000 × 101

= 1010000

Therefore, the cash received from the sale is $1010000.

Example:  If $1,000 of 3% bonds are issued at 10, the amount of cash received from the sale is

Solution:

Given, face value = $1,000

Points = 10

Amount of cash received from the sale = face value × points/100

Cash received = 1000 × 10/100

= 10 × 10

= 100

Therefore, the cash received from the sale is $100.

If $1,000,000 of 8% bonds are issued at 101, the amount of cash received from the sale is

Summary:

If $1,000,000 of 8% bonds are issued at 101, the amount of cash received from the sale is $1010000.