On January 2, 20x5, Fresh Inc issued 20-year bonds payable with a face value of $1,000,000 and a face interest rate of 10 percent. The bonds were issued to yield a market interest rate of 9 percent. Interest is payable semi-annually on January 1 and July 1. In calculating the present value of the bond issue of January 2, 20x5, the factor used to calculate the present value of the $1,000,000 is
A) 10%, 20 periods.
B) 5%, 40 periods.
C) 9%, 20 periods.
D) 4.5%, 40 periods.
D
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