given-a-bond-with-semiannual-interest-payments-of-300-and-a-lump-sum-principal-p

Question

Given a bond with semiannual interest payments of $$300 and a lump sum principal payment of 5$$,000 at maturity, how would you categorize these cash flows?

Accepted Answer

Interest payments are an annuity; principal payment is a lump sum.

Answer

Interest payments are a lump sum; principal payment is an annuity.

Answer

Both interest and principal payments are lump sums.

Answer

Both interest and principal payments are annuities.

Given a bond with semiannual interest payments of \$300 and a lump sum principal payment of \$5,000 at maturity, how would you categorize these cash flows?