X2 issued callable bonds on january 1, 2015. the bonds pay interest annually on december 31 each year. x2's accountant has projected the following amortization schedule from issuance until maturity:
date cash paid interest
expense decrease in carrying value carrying value
1/12015 $107,167
12/31/2015 $8,755 $8,038 $717 106,450
12/31/2016 8,755 7,984 771 105,678
12/31/2017 8,755 7,926 829 104,849
12/31/2018 8,755 7,864 891 103,958
12/31/2019 8,755 7,797 958 103,000
what is the annual market interest rate on the bonds?

market rate is 7.5%

Explanation:

We will work with the formulas for bonds amortization under effective rate method:

1.-  Face value x rate = cash proceeds

2.- Carring Value x market rate = interest expense

3.- Cash proceds - interest expense = amortization

With the second formula, and the givne value we are able to solve for market rate:

carrying value at 12/31/2015 is used to calcualte the 2016 interest expense:

106,450 x market rate= 7,984

market rate = 7,984/106,450 = 0.07500 = 7.5%

carrying value at 12/31/2016 is used to calcualte the 2017 interest expense:

105,678 x market rate = 7,926 = 0.07500 = 7.5%

So, we can conclude the market rate is 7.5%

steering wheels are always situated on the left side of the car.

always drive on the right side of the road.

white lines separate lanes of traffic traveling the same direction.

hashed or broken lines means you may change lanes when it is safe.

solid white lines mean stay in your lane.

yellow lines separate traffic moving in opposing directions.

hashed or broken yellow lines mean you can carefully pass, paying attention to oncoming traffic.

never cross a solid yellow line (or double yellow line).

when turning left at an intersection, pass in front of any cars that are turning left from the opposing direction (do not try to pass behind them).

use the left lane to pass other cars traveling your direction.

do not pass in the right lane unless absolutely necessary.

if you are driving in the far left hand lane and someone would like to pass you, move over to the right lane when it is safe to do so and allow them to pass.

you must always yield to pedestrians.

come to a complete stop whenever you see pedestrians trying to cross the street.

never pass a school bus if it has flashing red lights. wait until the lights have stopped.

be aware of bicyclists. often they share the road with cars and are supposed to also follow general traffic laws.

be particularly careful about driving in cities with bike lanes -- always check before turning that a bike is not coming.

it is mandatory to pull over or stop at an intersection to allow an emergency vehicle to pass you if you see one traveling with lights flashing and/or a siren running.

do not overuse your car horn. horns are used almost exclusively for emergency situations or for when you feel unsafe.

explanation:

the answer is risk management planning